Good morning. A very warm welcome to all of you here in Hong Kong. The last time we had 1 of these overseas investor trip was back in 2023. Some of you partook in it, including our newly minted CFO. Much has changed in the last 3 years. We've seen significant changes, structural changes, and shifts in the way flows are being wired and configured, whether they're in trade, supply chain, investment, FDI capital, in wealth flows, in currency mixes, all accelerated also by the advent and acceleration of digital transformation. We're here in Hong Kong. Hong Kong has been very active over the last few years in this whole reconfiguration process. The industry is actually very, very vibrant, whether you look at the IPO market, debt issuances are hitting record levels, sustainability angles.
If you think about insurance sectors, it's really writing, underwriting record levels of APE, family offices, wealth, et cetera. Our own business is also delivering consecutive years of record performance. Obviously, the question in your head is this gonna be just a flash in the pan or something structural? Perhaps this is something that you can judge for yourself over the next couple of days by being here. Now, we're here in what we call One Causeway Bay, which is our seventh and newest wealth and priority banking, sorry, priority private wealth center in Hong Kong. We have pioneered this, and we now have the broadest network of its kind. You're experiencing it firsthand because this is not quite open yet. This will be open next month.
Now, if you look that direction, just 30 kilometers, Sorry, you can't see it because it's blocked by the mountains and whatnot. 30 kilometers this way would be the China border, okay? If you take the high-speed rail, it takes less than 15 minutes. On this end, literally 300 meters will be where the world's highest level of average rent per square foot. It's higher than New Bond, higher than Upper Fifth. This is where mainland Chinese all love to come to stay, to eat, to shop, and increasingly to do banking and do their wealth. That's why we're set up here. Now, if you look just right down, we'll get it through the coffee break, right down, that is actually where the first plot of public land was auctioned and sold in Hong Kong in 1860.
Since then, every day, there's a firing of the noonday gun, okay? That has been its history marking time. You might hear a bang at around noontime, that's also part of the tradition of Hong Kong. Obviously, you're here also the primary focus also for us to deliver you with our new three-year plan because we achieved our previous one ahead of time. Part of the process is also for us to share with you our aspirations and what we would like you to measure us against and hold us to in the foreseeable three years, okay? Hopefully, our objective for the two days is very, very simple, to share with you what we believe are durable and structural trends and opportunities that continue that we will face and how the bank is going to position ourselves against these opportunities.
I'm gonna run very quickly with you with the agenda here. Bill Winters and Manus will cover these next chapter 3-year plans financial targets, followed by Noel and Tanuj Kapilashrami, which go through the transformation agenda, followed by business updates by Roberto and Judy Hsu. We're gonna have a very, very quick speed date breakout session, just to give you a sense of experience of some of the aspects we're doing on the ground here. We're gonna have drinks and dinner on the opposite side of the harbor at M+, which is a West Kowloon Cultural District. This is the world's most ambitious art and cultural center, covering 40 hectares. We're gonna be taking There's an underpass here that we can take a boat here. It's a 15-minute boat ride over there.
If you are seasick or worried about that, there's a shuttle bus option, both toing and froing from that venue, okay. The next day, we will actually have, as a start off, our central banker, chief executive of HKMA, to cover what's on his mind in terms of policies and what are his priorities for Hong Kong's financial services, covered by a bit of deep dive with myself, and Jean and Mary, really going through the structural themes that Bill will be sharing shortly. Then we're gonna have some fireside chat with clients just for you to get a sense of what is on their mind in terms of their priorities for their individual corporates, followed by digital assets, what we're doing around there.
This is really the kind of next couple of days, and hopefully, there's enough time through presentations and more importantly through interactions, because most of the insights may actually come outside of slides, okay? Wishing you a very, very fruitful next couple of days. With that, I'm gonna hand over to Bill.
Well, thanks very much, Ben. Thanks, Ben, Mary, as always, for the great hospitality in Hong Kong. Sorry about the weather. I hope we get a chance to actually observe what's out there. If you go into your pockets and you pull out your Standard Chartered issued banknotes, $20, $50, $100, $500, put them together, you'll see the profile of the mountain range out there with Lion's Rock, which is the local benchmark. If we get a sunny day later today, you'll be able to see it out there. If you don't, you can just go into your pockets, take out your banknotes, leave them on the desk when you leave, that will have been your small contribution to our event.
We are super excited about what we're gonna do here today. Before we get into the cut and thrust, I just wanted to hit a couple of things that we hope you take away from this, because it's it will resonate throughout each of the discussions that we have, we hope. First, that Standard Chartered, whatever wherever we've come from, and we're gonna spend a little bit of time on how we got to where we are, is a growth company. We're growing at a really good pace. We're growing, leveraging key competitive advantages that we've cultivated for some time. We've been investing into those. We focus our strategy on those growth opportunities, and we would like that to come through a little bit more clearly.
Of course, you see it in financial targets getting to 18% ROTE by 2030. Obviously, we have to grow to get there. We want to explain how we're gonna grow, why we're so confident that we can deliver that, and what's structural and differentiated about our bank. Second, we want to underscore the degree to which we have shifted our business mix very much with that growth and exploitation of those competitive advantages in mind. We're a very different bank today than we were five years ago or 10 years ago. We may continue to be a different bank going forward, but anchored in a set of very consistent strategic themes and areas of thematic change in financial markets that we've been focused on for some time.
We want to share that with you and put that into the context of our business. Third, we'd like to build your confidence in the same way that our confidence has been built, that our consistent track record over now a good period of time positions us very well to deliver on the rest of the plan that we're talking about. Those are just 3 sort of high-level thematic things that I want to call out up front. Hopefully we'll be able to point to what's really going on to support each of those statements as we go through the next couple of days. A few high-level thematic issues. The 1st is, you'll hear the term super connector a lot. You saw it in the video. You heard it from Ben.
You'll hear it from others. What we mean by that is that we have a network which is unique. Other people have networks. It's just ours is our network. It happens to be anchored in the fastest-growing markets in the world, connecting those to all of the major economic centers of the world with really good underlying financial infrastructure and products that are supporting that. That super connector role is at the heart of what Standard Chartered does. It leaves us saying that our network is our home market. Of course, we have a home market right here in Hong Kong, in Singapore, in London, in Dubai, et cetera. The real home for us is our network, and we are the super connector.
We're gonna talk about the strategic growth drivers in just a few moments. We've identified five that I outlined back in our annual report, but we'll dig in on that. I think you'll see those underlying driver themes present throughout the presentations because everything that we're doing, one way or the other, is either anchored in or heavily influenced by those key themes. Needless to say, we think we're very well-positioned for those themes. We've got very clear plans to take the substantial investments with our shareholder dollars over years into our core infrastructure and into our products and services built off those core infrastructures to become an increasingly more productive bank. You see that in terms of outcomes of financial guidance, which you've already seen, cost-income ratios at 57%, et cetera.
We want you to understand a little bit better what we've done to get here in terms of being able to be increasingly more productive from here, and of course, we'll set out those plans. This is what's going to drive our growth. This is what's going to allow us to achieve what we think are probably super normal growth rates and super normal returns off a super differentiated franchise that has a very long history, very strong underlying brand. Now, you know, we're just sitting here in 2026, and we see a future that's super exciting. We're not gonna spend a lot of time on history. I don't know why we started in 2015. It's more some sort of a fluky coincidence.
You know, in 2015, certainly when I joined the bank, the assessment I made, as best I could, was that this was a super franchise that had made some mistakes and fallen on some hard times, and that we could rectify the mistakes, and the franchise could flourish. As you can see, we've kind of split the history very, very broadly into three groupings. The reposition phase, you could call it cleanup, which was getting the balance sheet in place. In many ways, introducing the disciplines that had allowed us to stray with a super franchise into some, you know, not good areas at all. It took a while. We repositioned a lot. We took a lot of the income out of the bank in doing that.
It was low-returning income, but it was income. It looked like the bank wasn't growing. Actually, the things that mattered, the things that we're doing today, were growing quite nicely. It was obfuscated by that cleanup phase. We moved into the execute phase. We were clean. We were ready to go. We were investing in the growth engines. There was still a little bit of, quite a bit, in fact, of capital reallocation. You could call it reducing sub-optimal risk-weighted assets, things like that continued to suppress the top line, led to this steady improvement in returns. We now think we're in the compounding phase. The bank infrastructure is good. The core products and services are good. The strategic positioning is good. The areas of focus and the markets on which we're focused are good.
We think we can now compound. By the way, the economic backdrop is good, and we can talk about, you know, what could take that off track. We think that at this point, we can compound. Ultimately, compounding is what it's about. This is how we think we can get to 15% return, above that, by 2028, and then continue to grow to around 18% in 2030. That's not where we stop. We will focus increasingly on how we generate maximum shareholder value. You could say we could anchor that in measures of EVA, where ROTE will become one measure that we look at. The generation of EVA by getting an extraordinary return on capital that we deploy will become increasingly important during that period as well.
That's for the future. Okay. We think we have a distinctive growth offering today. We are a scale player. I remember when I joined the bank, 11 years or so ago, the number of times people, you know, one of whom may be sitting in the front row right now, said, "You know, you're just not fully scaled. How can you compete against local banks here or, you know, global behemoths there, like that one global behemoth that you used to work for, you know, who's got a $gajillion tech budget? You know, how can you compete?" The answer is. Of course, I didn't have the answer when I joined the bank.
When I looked in, I said, "You know, what we do, 1, we do it well, and 2, we're very scaled." You know, to be the number 2 transaction bank in Asia and to be the number 2 global trade bank, period, to be a, the number 3 wealth manager in Asia with the fastest growth, right? It's not just that we've got the size. We're also outperforming in terms of growth. How can that be for a bank that's not the same size as others, with whom we compete? It comes through focus. It comes through focus. It comes through, and you'll hear Noel and Tony talk about this quite a bit.
The fact that we've converged onto technology platforms that are almost uniquely uniform for a global bank across the world, which allow us to actually be more effective in these areas where scale is important. That's led to network income growth. It's led to the measures of network income and affluent income within CIB and WRB that are improving in a way that obviously is continuing to improve returns. Our cross-border affluent strategy, where we have scale in the things that matter, is what will allow us to continue to exploit our competitive differentiation. We're also quite diversified, not because we chose to be diversified. I'm, you know, one of these corporate finance theoretical people who thinks that diversification in its own right is not so valuable.
We have a diverse combination, whether it's by income type, interest income, non-interest income, whether it's by geography, whether it's by the product type. We're quite dispersed. Why? Because our customers are highly sophisticated. Whether they're cross-border, multinational corporations or governments or financial institutions or affluent individuals, they're sophisticated. They have multiple and deep and sophisticated banking needs, and we've met those needs over generations in many cases, which has led to a dispersed business model which is somewhat differentiated. It's also diverse, which is helpful, because there are cycles that move in different ways, and I think this builds a resilience together with our much stronger balance sheets, and we'll talk about that in some detail. This allows us to continue this growth at a supernormal rate.
Now, these 5 themes, you'll see sort of weaving throughout the sessions that we have. I covered these in the, in the annual report, in a little bit more detail if you want to go back for reference. You know, we took a step back as a team, and we said, you know, "What are the thematic areas of change in financial markets that are relevant for us? Are we positioned for these? If not, what are we going to do to address that?" This just didn't come up in February of 2026. We've been working on these for years. We thought it was helpful to put this down into a, a single schematic and then explore these themes in some detail. I'm gonna cover each of these, in turn on the following pages in the slide deck.
You know, the emergence of a multipolar, multialigned world, we all know what that means. It's a fact. Threat or opportunity? The answer is yes. We've been investing in being the super connector in a fragmented world, solving the complicated client problems, which is driving our outperformance and network income growth, right? It's nice to talk about themes. Where's the money? The money is, you see it. That's what's driving the growth of Standard Chartered. The digital transformation, you know, this is not, you know, customers want to do their banking online. That's 1 small part of it. The financial infrastructure is changing fundamentally into digitized money and supporting agented commerce, all of which is very early stage. We've been investing in this for 7 years. It's going to happen. Like, mark my word, it's going to happen.
It will happen slower than we think for a little while, and then much faster than we think. We're right at the inflection point, in my opinion. You'll all have your own views. We're positioned for that. This to us will be one of our biggest opportunities. Getting it wrong could be one of the biggest threats. Obviously, we think we're well-positioned. The changing role of banks in the economy. You know the stats. We'll go into the shift of capital from banks to non-banks. Threat or opportunity? Yes. We position ourselves overwhelmingly as a bank that's gonna be servicing the non-bank sector. We always have. We will continue to. It's a huge area of growth for us. It's been a big driver of the improvement of our returns.
Rising wealth participation, I don't need to tell you here. You know, Ben's comment about the real estate up the road being more expensive than anywhere in the world, is a reflection of the fact that this is a very attractive destination for wealth to congregate. Frankly, we have a extremely strong position to receive and help manage that wealth, as well Singapore, as well in Dubai and U.K., and we will continue to expand that business, and we'll explore those trends in some detail. The transition economy, which, you know, people aren't talking about as much as they did, we are because we're continuing to grow our sustainable finance income line at a rate that's faster than the rest of the bank. That's because the clients that we serve are increasingly focused on executing their own transitions.
That will accelerate with the disruption in the Middle East and higher energy prices. This is not a flash in the pan. This is not a political fad or political correctness. This is money, and we're doing a good job. By the way, the fact that we're doing the right thing and are a thought and action leader really helps us to attract good people and retain them. When we can make money on top of that, nirvana. Okay.
Looking at these themes, in turn, we're not gonna slavishly go through these slides, but the multi-aligned, multipolar world, which in our case substantially means very strong anchor in Hong Kong and China, very strong anchor in the US, given our leading position as a US dollar clear, very strong position in South Asia, ASEAN, Middle East, Africa, and an increasingly strong position with clients in North America and Europe. That's our network. It is fragmenting at almost every fissure point and makes transaction flows harder on the margin. It makes regulation fragmented, which means duplication of underlying services and capabilities. We see that the underlying trend is a positive one. Asia-Pacific is becoming an increasing percentage of GDP and global trade.
We're obviously seeing that China continues to be a major and growing exporter. At the same time, capital controls are actually going down, not going up. You know, Ben will talk in some detail, and I think quite insightfully, when we get to that session on Thursday about why the opening up of China in particular, we think is inexorable and why it's actually in the Chinese policymakers' interest. How are we positioned for that? Our transaction banking role, our leading role as an RMB bank globally, number one in 20 markets, leading FX and FM cross-border dealing capability, Bond Connect, Stock Connect, Wealth Connect. These are all positions where Standard Chartered is a leader in connecting across the fragmented world to the advantage of ourselves and our shareholders.
The digital transformation, we can talk about a couple of things. One is, I will proposition, as I have many times, and you've heard me say it, that the blockchain-based settlements are inevitable for much of what happens in financial markets. It's cheaper, ultimately. It's easier. It's more transparent. It's 24/7. It's real-time. The underlying money is in contracts are programmable. That's all sort of good stuff in and of itself. The game changer and the accelerator of this trend to digitization of money will be AI and agentic commerce. The agentic commerce, meaning agents are executing with agents. That's already happening in many securities markets. Look at Jane Street and Citadel's financial results. That's agentic commerce in writ large. AI-enabled, low latency, 24/7 core infrastructure. We can go head-to-head with those guys.
We're not making their P&L. That's the next objective, but that would take us well beyond 18% ROT. We are completely focused on serving our customers in the agentic commerce world. We've been investing in this trend for 8 years. You know, when Alex and I first started talking about investing in digital assets with a market maker and a custodian and a tokenization engine 8, 9 years ago, I don't think we had agentic commerce in mind specifically, but we knew that this was a super powerful tool that we had to understand well as a bank. We built capabilities. We built those capabilities in the bank. You can see that we're 20% market share in the minting and burning of USDC. We're the 3rd-largest minter and burner.
Minting, you know, minting and burning is the conversion from fiat to digital to fiat through USDC, which is the most consistently used stablecoin in compliance markets. The number one and number two are crypto-native companies. Most stablecoin activity is confined to the crypto world today. We're number three with a 20% share of the conversions because we're the destination for people who are converting from the fiat economy to the digital economy and back again. We could not be better positioned for the next wave of evolution in the digitization of money. The AI tools that we built that Noel and Tanu are gonna talk about in some detail, the infrastructure that we've put in place, which you can't see today, we can just talk about it.
That infrastructure is designed for this world, and we will absolutely be a leader in the space as we are today. We know that the migration of capital from banks to non-banks, you can see it in notional loan outstanding, so you can see it in the improving RWAs and return on RWAs for us, but also other banks. You can see that in the NII as a proportion of our bank's income, which is a little bit over half, but it's been decreasing consistently and will most likely continue to decrease. Obviously, there's a rate sensitivity component to that. That aside, the structural trend is clear. We had a financial crisis. Banks were weak going into the financial crisis. Regulators have stepped up their strengthening of banks. Non-banks are not regulated in the same way.
That's not a problem, and it's not wrong. They're also not leveraged the way banks are. If I were the czar of financial system regulation, I would also be aggressively strengthening the banking system and allowing non-banks to take the unlevered risk. Oh, that's gonna happen. We can either fight it and go to Washington and whinge or go to London and whinge or Basel, we can say, "Yeah, there's a trend here that we can be part of." We can be the facilitator, given our origination capabilities, given our underlying financial plumbing capabilities. We can be the guys that are shepherding in this new world, making good money, improving returns dramatically while we do that. The wealth participation is clear.
Asian wealth, Chinese wealth in particular, is still a small proportion of global AUM, but it's growing very fast, and we're extremely well-positioned for that. It's not just China. It's ASEAN. It's India and the rest of South Asia. Of course, it's the Middle East, which is going to go through its own set of changes as we know. We've matched that underlying growth trend with a set of products, capabilities, partnerships that are differentiated. Judy and Rayang will talk about that. Jean will talk about it in some detail. I don't want to get into too much on this other than to say we are 100% behind this trend and have been for a couple of decades, right?
This one preceded me by quite a bit, but we're definitely into acceleration mode and, you know, full credit to the team for having done that. Sustainable finance and the transition economy, we've not seen a material slowdown in the pace of spend in sustainable infrastructure. That is actually going to increase now with the price of oil at $110 a barrel and the price of a PV cell pretty much unchanged. It's pretty obvious where the incremental power-generating dollars are gonna go. By the way, those PV cells are local. They're not going through the Straits of Hormuz or anywhere else. The underlying, I think the underlying economics are very compelling, but the policy objectives are also clear in most parts of the world.
In our markets, there's been no pulling back. In China, there's been no pulling back on sustainability investments. In India, South Asia, no pulling back. We're capitalizing on that with the increasing income. These measures here, they're outcome measures. We focus on the changing role of banks that has the effect of reducing our NII as a percentage of income, increasing our non-NII as a percentage of income. Obviously, we're growing the non-NII because we're growing wealth, we're growing financial markets, we're growing our fees around our transaction banking services. The non-NII is growing. It's not growing as fast because we're optimizing returns. Increasingly, those RWAs are going into the non-banking sector where they probably belong. Network income reflects the fact that we've got a distinct position vis-à-vis our sophisticated cross-border clients.
They turn to us, it grows faster, less capital intense, generates higher returns. Financial institutions, same thing. We've always been a banker's bank. I mean correspondent banking is in a lot of ways where Standard Chartered started 170 years ago. But we've expanded that sort of deep knowledge of frankly, the most sophisticated treasury clients in the world are other banks, to the broad range of financial institutions, asset managers, sovereign wealth funds, financial sponsors, et cetera. Obviously, affluence, we've just talked about, and all of these are significantly improving trends. Call them outputs. They are outputs, but they're coming on the back of very deliberate choices that we've made along the way. Our resilience is substantially improved.
I mean, from time to time, again, none of us are super big at, like, backpatting ourselves. I will let you do that at the end of the session. You know, this is just like a, like a, just a quick snapshot. We've improved our returns from 0 or negative to 12% on the way to 15% and 18%. We've done that with doubling our capital position over that period. We've done that while reducing our risk-weighted assets, dramatically improving the quality of our underlying loan book, which of course has led to the improvement in return on risk-weighted assets.
You know, if I'd said that 10 years ago, we're gonna, like, significantly de-risk the bank, grow income and dramatically improve returns and profits, you would say, "Well, that's kind of stupid because that's not banking as we know it." That's what the bank has done. Not because we set out to do it, because we just kind of look and talk to clients every day, said, "What do you need, and what are you gonna pay us for?" I mean, we're quite mercantilist as well. You know, "What are you gonna pay us for?" We're not gonna pay you for your money because it's undifferentiated. We are gonna pay you for all these interesting products and services where you're somewhat unique. Of course, we invested heavily in those products and services.
We invested with your money, for which I thank you, but we're getting a good return on those investments, and we're much more resilient than we are today. Now, Manus will talk about this in some detail, but as over the past several years, obviously, when we were going through the cleanup phase, the reposition, we weren't paying dividends, we weren't buying back stock, and we were conserving capital to reposition the bank. We began the stock price quite cheap in our estimation. We, as we entertained shareholder returns, we focused on buybacks. We introduced a dividend a little bit later, still skewed to buybacks. We're now sitting with a stock price that's higher than it was. I won't say where it is relative to fair value. We think there's still tremendous value in our stock.
We're very happy to buy that stock. We also want to make sure that the shareholders of ours that would like to have a steady dividend see that we will pay out in excess of 30% of our profits in dividends, not given our expectations for the company would cause our dividend to continue to increase, a progressive dividend strategy. When we think about what the balance is now going forward of, what are we gonna do with our capital, the substantial and increasing capital that we're generating, we will continue to invest in our business first and foremost. We're getting a very good return on organic investment in each of the strategic areas in which we focus.
We feel like we are fully investing in our strategic areas today, which is why we then turn to returning capital via buybacks or increasing dividend. At the current share price, we would see a rebalancing of the distributions between dividends and buybacks. We'll talk about roughly a third, a third, a third between organic, buyback, dividend. Of course, we're gonna look at that as a function of the investment opportunities, the share price relative to what we would consider to be fair value, and any changing expectations as it relates to dividends. As I said, Manus. By the way, congratulations, Manus. Manus, he's been acting like the CFO for some time, so. I mean, sometimes he acts like the CEO. We'll keep him in that box, but that's okay.
No, we couldn't be happier with the team. Congratulations to Tanuja, is our Chief Operating Officer, who you're gonna hear from shortly, and you'll see why. Tanuja is partnered up with Noel during the session as our Chief Operating Officer. Congratulations to both of them. Productivity is a huge area of focus for us. It has been for some time. We've gone through different phases of focus on productivity. A lot of core infrastructure building in recent years. You've heard me and others talk about the massive investment that we made in financial crime compliance going back 10 or 15 years. 12 years. We have, you know, very solid compliance infrastructure today. Of course, it always needs to be refreshed. Very substantial investments in cybersecurity. We feel like we're well-positioned.
There's zero complacency at Standard Chartered Bank about cybersecurity, Mythos, non-Mythos, Codex 5.5, anything. We've invested heavily in migrating our finance infrastructure from Oracle to a private cloud-based SAP platform for both finance and all of our HR applications. SAP considers us to be a poster child for large-scale migrations. You can hear that from them. Yeah, it reflects the focus and investment we've made in the bank. We've migrated our data centers in the eastern 2/3 of the world into a highly sophisticated private cloud with geo-resilience, i.e., Hong Kong, Singapore, Dubai. When the drones took out the AWS servers in Dubai, we were able. I'm still on Noel's line, so adjust your script. We were able to migrate our entire data estate from Dubai to Singapore in hours.
It continues to be mutually backed up. We had no impact from Dubai, just to be clear, that was precautionary. We're not on the AWS cloud there. I mean, this would've been impossible a year ago, much less five years ago. We've made those core investments in infrastructure. Now we can build these super productive machines on top of that. That's exactly what we'll do. You'll hear about that in the transformation session. The income employee, income per employee increasing substantially, is a result obviously of income growth, but also of a fundamentally different infrastructure growing in its cost at a very different pace, than has been the case in the past or than, certainly relative to revenue. That's delivering that step change in cost-income ratio. We'll be digging in on this.
Manus will Noel and Tanuj Kapilashrami will be digging in on this. Plenty of opportunities. I just wanted to hit the high-level thematic. We're 100% focused on becoming a fundamentally more productive organization, and we've made the investments to do that. All of this is gonna be enabled by AI. Again, Noel will speak in some detail about where we are in AI. I'm super proud of what our bank has done because, you know, we took the step back 2 years ago to build a core AI platform that's now hosting hundreds of models and use cases, tens of billions of tokens being processed on a very regular basis, done efficiently, safely, and soundly. Right, everybody stands up and gives a lot of BS, frankly, about AI. You'll probably get some BS from us as well. Fundamentally, this is real.
We're using this. It's making a difference. I think we're extremely well-positioned both for defense and for offense. Now, our transformation through the years has been powered by many, many episodes of innovation. This innovation has happened in SC Ventures, which we focused on specifically for a while. We were calling that out as a specific business line. A lot of the innovation is happening right in the core of the business. Given the core foundations that we've built, the innovation machine can accelerate from here, not decelerate. These are just a few of the ventures or other initiatives that we've undertaken consistent with the five themes that we've talked about. I'll let you peruse those. We have sessions that cover most of this. You can ask some questions about each of those as we go through this.
Just restating the financial targets that you've already seen and from your, no doubt, your quick release this morning. In a way, I'm most excited about the high teens CAGR for EPS because I think that's fundamentally what should drive recognition of value in a growth company. I think if we can deliver consistently, as we have, high teens growth in earnings per share through that combination of earnings growth and share count management, I just think this is a fabulous growth opportunity that it is our job to demonstrate to you why that's the case and why you want to buy these shares. There's no hype in there. These are just the numbers. The 15%, 18% ROTE we think is a good benchmark.
you know, fundamentally, what we want to do is deploy capital where we can get a great return, positive EVA, and to do that increasingly. As we get into the higher teens ROTE, we probably focus a little bit less on ROTE and a lot more on EVA just to make this bank bigger and bigger and bigger because we've got a super franchise. Today's not about EVA. Manus didn't want me to say that at all. Once he's fully feet under the table as CFO, he's going to introduce an EVA framework, which he's going to take credit for, and I'm going to applaud him.
With that, we're gonna have You'll see over the course of these sessions, we've actually got five outside perspectives from experts, certainly world-class characters that are related to the five themes that we've got. The first that we've got is Parag Khanna. He'll be known to many of you as an academic and geopolitical commentator, talking about what this fragmentation means for all of us. There will be four others related to the other themes interspersed throughout the sessions. Thank you again for joining us. Thanks for listening to all of us, and please enjoy this video.
I'm Parag Khanna, and this is my perspective. I believe the Asianization of the world is truly the great mega-trend of the post-Cold War era of the past three to four decades. When we look back a couple of decades from now, I believe everyone will appreciate this. The rise of China is a component of the rise of Asia and one of the main drivers of the rise of Asia. As I always remind people, the story of Asia is much larger than just China. You're now seeing growth rates in what I call the third or fourth wave of Asian growth economies, South Asia in particular, India, Southeast Asian countries, whether it is Vietnam, Indonesia, Thailand, and others, being higher than China's growth rate at the moment.
Part of what's driving Asianization is the force that the world is looking to Asia not just as a place to produce, but also a place to sell. There's also a calibration that's happening as China, India, and other Asian powers reach out across the Indian Ocean, to Africa, to West Asian countries, to Europe, to Latin America, and use that playbook to build Asia-centric rules and institutions. We see this happening in trade, where the largest zone of trade growth in the world is indeed the Indian Ocean. Scholars call it Afro-Eurasia. The Afro-Eurasian system is truly the epicenter of global trade. We see it with infrastructure investment and other means.
The interrelated conflicts in the Middle East, whether it is the Israel-Gaza war or the current Iran war, and tensions and conflicts that date back several decades, has been a zone of turbulence, and it affects and has ripple effects around the world because of its central geography. The current conflagration has reminded us of how connected the world fundamentally is because of the shocks that we're experiencing in everything from fossil fuels, fertilizers, disruption of trade routes for the flow of goods. It's a reminder, of course, that globalization is, in fact, thriving. As I like to say, even the supply chain has a supply chain, because if you remain dependent on long distance, just-in-time, far-flung, vulnerable supply chains, you don't really have control over your fundamental resource dependencies and trade networks. Our global system is ever more organized according to infrastructure and supply chains.
Infrastructure and supply chains fundamentally underpin global capitalism, the world economy, and commercial exchange as we know it. We couldn't have this pace of global trade if we did not have that fundamental underpinning of rapidly advancing, all-encompassing, globe-straddling infrastructure and supply chains.
Hello, everybody, and welcome to Hong Kong. I am delighted to say that I know most of you in the room already. For those online who are less familiar, my name is Manus. For the avoidance of doubt, I am not Manus the AI agent, which appears to have appropriated my unusual Irish name, and nor has Meta tried to invest $2 billion in me recently. I am, in fact, the head of investor relations at Standard Chartered, and for the last 24 hours, the interim CFO. I joined the bank a couple of years ago, and I have been looking at the bank for a very long time because I was a sell side analyst previously. I have seen Standard Chartered through many different cycles.
I can genuinely say that this is an extremely exciting time to be taking on this role. It's exciting because of the foundations that we have built. Those are foundations in terms of client relationships, foundations in terms of our core technology, and foundations in terms of our strategy. It is because of the strength of those foundations that we are now ready to enter into a phase of acceleration against the backdrop of those trends that Bill has talked about. Before we get into the future, let's just look a little bit about those 3 phases that Bill talked about already. Reposition, execute, and compound. Back in 2015, the bank had to go through a significant period of repositioning and restructuring as it removed a number of high-risk assets from the balance sheet.
That meant that for a period of time, both income and costs were broadly flat. By 2019, the bank was ready to grow again and to distribute capital again. In fact, we'd initiated a share buyback at that time. Of course, just as we got going, COVID hit, which slowed our momentum, in particular, had an impact on net interest income. Coming out of COVID, growth has accelerated. The important thing to understand is that that acceleration in growth has not just been because markets have been conducive. It's been the direct result of the foundations that we have put in place over time. We are now poised to continue that and to compound that growth going forward. Let's look at the last couple of years in a bit more detail.
Back in February 2024, we laid out a 3-year plan. I'm delighted to say that we're able to deliver on that 3-year plan in 2 years. We managed to deliver revenue growth of 16%, which exceeded our 3-year growth targets within 2 years. We delivered positive income to cost jaws over that timeframe. We delivered an underlying Return on Tangible Equity of 14.7%, which well exceeded the 13% we were targeting, and which itself had already been upgraded. We were able to distribute capital. Not only did we do well, we did well relative to peers, we think, as well. We showed the best ROTE improvement amongst our peers over that timeframe. We showed the strongest income growth. We had exceptional EPS growth and TNAB per share growth as well.
Those latter two were powered by a 15% reduction in our share count over that period. That was enabled by the over GBP 9 billion of capital distributions that we've announced since February 2024. That GBP 9 billion, just to take a pause on it, represented 45% of the market capitalization of the bank when we announced it. I know you know these numbers already. There's also an awful lot that's been going on beneath the surface during the course of that last couple of years. We have fundamentally been engaged in a transformation of the core of our bank. You will hear more about that through the course of today. We have changed our organizational design and made our processes significantly simpler across the bank.
We now present the bank to you in a way which is easier for you to understand, and on a reported basis, more accurately represents the banks that you own as shareholders. Let's look at the financial targets. Bill has already mentioned the ROTE and the EPS targets. I'm gonna spend time talking to you about the building blocks to get there. First of all, we will deliver a CAGR in our income of 5% to 7%. That will be driven both by the macro trends, but also importantly, by the investments that we've made to take advantage of those trends. We will deliver a cost-income ratio of 57% in 2028. That is down from 63% last year.
We continue to expect our loan loss rate through the cycle to be 30-35 basis points. We will operate across our CET1 ratio range of 13%-14%. Lastly, we will deliver a dividend payout ratio of at least 30%, which will lead to a progressive dividend per share over the course of the plan. Combined, those are the factors which are going to take us to a greater than 15% ROTE in 2028, and to a high teens EPS CAGR over the course of that period. How does that look in terms of our ROTE walk? Well, I've given you two separate ways to think about the ROTE walk here. The first is the more simple P&L view.
Put simply, we're going to grow revenues more quickly than we grow our expenses, and that's because we believe we have powerful top-line trends, and we are investing to ensure that we can scale our revenues at lower marginal costs, a topic we'll come back to frequently. This will be offset by an assumption that there will be some normalization of impairment if our impairment moves back to the 30-35 basis point range, which we see is through the cycle. We delivered 19 basis points of impairment last year. For the avoidance of doubt, we're not seeing any new risks on the balance sheet at the moment, but 30 basis points-35 basis points is the assumption for planning purposes. We will see a small uplift from operating dynamically across the course of the CET1 ratio range.
I think more interesting, and what I'm gonna spend more time on, is the second part of this ROTE walk. Really what drives this ROTE improvement is a mix shift in our business. We are going to continue to see our WRB business, our retail business, move towards the affluent space, and our CIB business will continue to see its growth being driven by the network and by financial institutions clients. Combined, those two factors will drive an uplift in ROTE of almost 400 basis points over the course of this period. Let's take a look at that mix shift in a bit more detail. You know about our CIB and WRB businesses because we've had investor seminars on them over the course of the last 18 months.
In CIB, we are expecting our revenues to move from 54% financial institutions to 60% over the medium term. Our network income will move from about 2/3 of income to 70% of income by 2028. In WRB, our affluent business will move from 70%-75% between last year and 2028. Those are the mix shifts we're seeing. They have a number of important impacts which will drive our returns higher going forward. Firstly, moving into these businesses means we are moving into businesses which are higher income return on risk-weighted assets. Within CIB, our network income and our financial institution, FI business, are both about 200 basis points higher in terms of income ROA than the domestic business and the corporate business respectively.
Within WRB, our affluent business is much higher return on risk-weighted assets than our non-affluent business. This is about more than just a more efficient use of capital from that mix shift. Moving ourselves into those customer segments also allows us to move into much better areas of growth, which really tap into the areas that Bill has talked about already and which you will hear plenty about during the course of today. We also think that by moving into those areas, the customers that we serve will be stickier, and they'll be stickier because they tend to bank with us across different geographies and because they take multiple products from us. It's a higher growth, stickier customer base that we're moving into. The great thing is we have already invested in the platforms which are allowing us to deliver that growth.
We expect to see strong operating leverage by focusing on those customer segments which we know well. Lastly, we think that that mix shift will lead us to a lower risk profile as a bank overall, which I'll come back to discuss in more detail later. We think it will drive higher connectivity between our affluent client base and CIB. It's not just about a revenue mix shift, though. There is also a shift that we expect in the balance sheet as a result of our business moving. Put simply, we are seeing an increasing surplus in our WRB business as it generates cheaper liabilities. The cheapest form of funding we have comes from WRB, our capital liabilities in WRB.
We are continuing to generate a surplus of liabilities, i.e., there's more deposits than ways to deploy them at the moment in WRB. Within CIB, our lower cost, higher quality deposits in our CASA-based fair, the operating accounts, are also continuing to grow very effectively. What that means is two things. First of all, of course, it means a lower cost of funding going forward. Secondly, by having those high-quality liabilities, we have options for deployment of those liabilities into different areas of the balance sheet, be that into the banking book or into the trading book. That means that the treasury portion of our balance sheet, which has already fallen in recent years, is likely to continue to fall.
That's important because we estimate that going forward, it will generate about a 50 basis point uplift to our ROTE through the course of the plan. That 50 basis points, to be clear, is already embedded in the ROTE rules that I've given you, so it's not incremental. I thought it was very important to highlight it to you because it is very fundamental to what we are doing as an institution. It's something that we've seen over recent years. It's something that we think is durable and will continue over the course of this plan, and we think it will carry on for the future, driving the synergies between our WRB business and our CIB business on the balance sheet as well as operationally. Let's look at the revenues in a bit more detail.
We've grown revenues by 16%, as I said, over the last couple of years. That's despite NII headwinds because of the rate environment. Rates have really affected the blue bits of this chart. Our transaction services business has seen good growth in operating accounts and good growth in fee income, but it's had NIM headwinds, which means it's gone backwards for the last couple of years in revenue terms. Similarly, our deposit and mortgage business within WRB has been broadly flat, largely as a result of net interest margin headwinds. The real drivers of growth have been coming from what we call our engines of non-interest income growth. Our global banking business, which has grown at 13% compound, adjusting for our aviation finance business. Our global markets business, which has grown at 12% compound.
Our wealth solutions business, which has grown at a fantastic 26% compound. Together, those non-interest income engines have meant that we have managed to grow our non-interest income by a 13% compound rate over the course of the last couple of years. That is what we expect to continue going forward. We are expecting growth of 5%-7% compound over the next 3 years. Within that, we think that non-interest income will continue to grow faster than net interest income. We already generate 47% of our income from non-interest income, which is higher than peers. Because of that momentum that we're seeing, we expect that to move to north of 50% by 2028, well higher than peers.
It is a unique feature of Standard Chartered that we are able to continue that growth and something which we think is critical to the future for the bank. For the avoidance of doubt, we're not changing our net interest income guidance for 2026. We continue to expect 2026 NII to be broadly flat on 2025. We do expect some modest growth in net interest income thereafter. Turning to expenses. We've talked a lot about revenues, we know that we have structural inefficiencies in the bank, which we need to address. We have invested, including through FFG, in efficiency programs, which have allowed us to keep our back office costs broadly flat over the course of the last couple of years.
We know that we now need to ensure that we can deliver improved efficiency for you going forward without asking for any additional large below-the-line charges, and that is the commitment that we're going to make for you today. We know that our operations and functions continue to benchmark somewhat less efficient than peers. You're going to hear later today, from Noel and Tanuj about all the efforts that we are making to ensure that our bank becomes simpler, more connected, and faster to drive better efficiency going forward. The outcome for you as shareholders is clear. We are going to move from a cost-income ratio of 63% to 57% over the course of this plan. We will deliver positive income to cost shores in each year during the course of the plan.
We will also ensure that the revenue productivity of our employee base continues to improve, and that will be enabled partly through a rationalization of our operations. We are a bank that is investing to grow. We have tremendous opportunities, and we will continue to invest to grow. I know that there are still inefficiencies in this organization which we need to address. Our challenge now is to move to a process of continuous improvement to ensure that not only do we grow the top line each year, but that we also improve efficiency and return each year. That is what we're aiming to deliver. Let me be clear. We know, and we are committed to ensure, that the top-line growth that the bank is going to deliver over the next few years will deliver the maximum possible profitability for shareholders.
Let's look a bit at risk now. I talked before about how the business model is moving it into lower-risk customer segments, and I think that is really fundamental to what we're doing. This is not just about taking individual underwriting decisions differently. This is about an entire shift in the way that we think about the business. Let's look at it in numbers first of all. Within our CIB business, you probably know already that the investment grade proportion of our exposures has moved from 42% to 74% over the course of the last decade. Even in more recent years, if we look at the probability of default within our corporate book, it's continued to fall. This is based on Pillar 3 data.
It's continued to fall quite sharply in recent years, and we think it now benchmarks very well versus peers, and we're very pleased with that. Within WRB, we have been moving to focus on affluent clients for some time, and that has enabled us to exit certain single product unsecured relationships with customers. Which means that the proportion of unsecured balances on the WRB balance sheet have moved from 19% to 12%. A 7 percentage point drop over the course of the last decade. Again, moving us to a lower risk place. Now, having said that, the world is an uncertain place, and we are very happy to continue to guide to an expected through the cycle loan loss rate of 30 to 35 basis points.
We fundamentally believe that the mix shift that I talked about previously will not only drive better income to return on risk-weighted assets, but will also drive us into a lower risk business model that is enduring. Let's talk about the balance sheet and capital. We have maintained a very strong balance sheet over the course of the last decade, and we certainly intend to maintain that position going forwards. We have a CET1 ratio target range of 13% to 14%, and we've tended to operate, if you look back at the last seven years, at the upper end or even above that range. Indeed, at Q1 2026, we had a CET1 ratio of 13.4%. That gives you an indication of where we expect to operate going forward.
We will now operate dynamically across the range such that on average, you should assume we'll be at the midpoint of the range. We are a very capital generative bank, and we have generated more than 330 basis points of capital since 2023. If you look at the uses of that capital in the last couple of years, we've retained about 25% and distributed about three quarters of that capital to shareholders via dividends and share buybacks. Going forward, we expect to generate more capital because we're going to be a more profitable institution. Very broadly speaking, you should assume that the uses of that capital will be about a third for RWA growth, a third for dividends, and a third will be available capital, including for buybacks. Let's look at that framework in a little bit more detail.
Our first use of capital, as Bill mentioned, will be to support our business growth. We expect to grow the top line, as I've said, between 5% and 7%, and we expect our average risk-weighted assets to grow less than that. In other words, we are expecting our income return on risk-weighted assets to improve over the course of the plan. Secondly, as I've mentioned, we will deliver a dividend payout ratio of at least 30% with a progressive dividend per share. We believe after those two uses of capital, we will continue to have significant available capital for us. The first and most likely use of that capital will be for share buybacks. Because as Bill said, we continue to think that our shares represent exceptional value at these levels.
We need to be aware as well that we operate in markets which offer us growth opportunities, which we think many of our peer sets do not have. Therefore, if we are able to find opportunities to deploy our capital in a way which both drives income growth above that 5%-7% expectation and meets our income return on risk-weighted asset hurdles, we will consider that as an option. Lastly, we will continue to consider inorganic growth opportunities, these will always be in line with our strategy. For the avoidance of any doubt, there is nothing included in the plan for inorganic growth, we don't have anything that we are planning at the moment, there's nothing on the table for that. The guiding principle of our capital allocation is actually relatively straightforward.
We will allocate capital in order to drive the maximum economic value for our shareholders. Let me summarize what we have been saying, both Bill and I, during the course of today. We're gonna deliver a ROTE in 2028 of over 15%. What's gonna take us from that 12% level we did last year up to 15% is income growth driven by some strong structural trends, supplemented by the investments that we've made in core areas. We are shifting our business mix into areas which enable us to access that growth and deliver higher returns at the same time. Because of the work that we have done on transforming the core of the bank and will continue to do, we're going to be able to scale at a lower marginal cost.
We will see strong operating leverage during the course of the plan. We will maintain tight discipline on risk, we will maintain a strong balance sheet, and of course, we will continue to distribute excess capital to shareholders. All of those factors can take us from 12 to north of 15 in 2028. Importantly, all of those factors continue past 2028. It is exactly the continuation of those factors that we have enormous confidence in and which will take us to an 18% ROTE in 2030. We've repositioned the bank. We've been executing very strongly against the plan, and we're now excited to be entering into a phase of compounding growth. Thank you. With that, Bill and I are happy to take some of your questions.
Let's get ready. Just a reminder that if you're asking a question, please wait for the microphone to come to you and speak really clearly so that everyone on the webcast can hear what you're saying. Thank you.
Good morning.
Good morning.
Jason
Yeah.
Mayfield from UBS. Thank you for having us here in Hong Kong.
Thank you.
Thank you for taking our questions. First of all, to Manus, and on behalf of the sell side, congratulations.
Thank you.
There's certainly hope for us. Hopefully. Manus, first question for you. On the capitalization piece, which you were just describing, RWA growth is gonna be a big focus, right? You've mentioned that about a third of capital generation goes to RWA growth. In the third bucket, you also got RWA growth, and a lot of the income growth is balance sheet light. Give me a little bit more precise about what you think maybe your footprint demands or some other way to add color on RWA outlook. Bill, for you, please. That really clear sort of analytical framework for the way you think the world is moving. You use words like inevitable and inexorable. Can you talk about what that means for the balance between income growth and cost growth? You wanna be ahead of everything.
You wanna be in the right places and invest it appropriately. How do you balance those sort of factors in the delivery of jaws over the next three years and indeed over the next four?
Yeah. Let me start with the second question, then I make it a little bit of a tip question on the RWA. Give me a second. Then I know you directed that one to Manus appropriately. Yeah, we do have a, I mean, analytical framework sounds a bit rigid, but I think we identified, I mean, we're going back years, some underlying trends. We have been investing in that. We also understood, and you'll hear a lot about this from Noel and Tanu, we needed that we need to invest in our underlying infrastructure. Yeah, if you're trying to optimize ROTE in the coming year, those aren't investments that you make. We have.
You know, there Certainly during that repositioning period, when income was flat-ish and costs were flat-ish, you know, both down 1% per Manus' slide. The We definitely could have cut costs faster at the expense of the future, and we definitely could have slathered income by not exiting those suboptimal RWA, those RWAs. Which would have had the unfortunate effect of not having that nice upward-sloping ROTE line over that period. Look, we maybe out of naivete, maybe out of confidence, maybe just because it's the right thing to do, we've been investing in the future all the way through. We're not gonna stop now. Now we got a more balanced payoff. The things that we've been investing in are paying off.
It gets to a 12% underlying, 11.9 ROTE on the way to 15% and 18%. Obviously, a chunk of that also reflects stepped-up investment and Fit for Growth and other things. We're not gonna stop investing in the future. We are gonna see an increasing amount of the fruits of our earlier labor flow to improving ROTE and EVA. Which then takes me just very quickly to RWAs. Our RWAs have decreased significantly, but our balance sheet is more or less the same, i.e. density has decreased. We're finding some very attractive ways to use our balance sheet in a higher returning way. What we've always been focused on is returns. Optimized returns.
Of course, we have an eye to client franchise and, you know, having gone through these RWA optimization efforts at other banks. I mean, several of them, they're all called JP Morgan, but we kept on going through the same thing with different owners. You can go too fast. You can also go too slow. Then you can get it just right. Only time will tell whether we got it just right, but it feels pretty good to us in terms of pacing. A little bit slower than one might have liked. Might explain why our share price went no place for, you know, the better part of 5 years. We're definitely ending up in a good place. As the saying goes, all's well that ends well. Not that we're done. Manus.
Yeah, it's not ended, Bill. It's just beginning. It's on the capital allocation framework. Just to clarify, we're expecting 5%-7% revenue growth. What I was saying on stage was that our RWA growth within our base case will be below that 5%-7%. That's what will drive the improvement in return on risk-weighted assets. I was also saying that over the course of this timeframe, it is possible that there will be opportunities to deploy capital, which will take us above that 5%-7%. If it can take us above that 5%-7%, and if it meets our income return on risk-weighted asset hurdles, we will consider it.
Just for the avoidance of doubt, that gray bar that you saw, the available capital, our planning assumption is that that will be delivered back by share buybacks. That's what we built into the model. We are not assuming any incremental RWA growth. We are simply retaining the ability to commit to that RWA growth if it is EVA generative and if it is the right thing to do for shareholders.
Let's go to Quin Tong.
Thank you. Thank you for your time, Manus. This is Quin Tong from China Securities. Congratulations for this very strong guidance, and thank you so much for the very nice presentations just now. I also have two questions. The first for Manus. I'm so happy to see the exact numbers of the ROTE contribution from the two corporate business, CIB and WRB. Can you give us a little bit more color on the exact product categories or income categories of this ROTE contributions of these two businesses? Second is for Bill, because this question is a bit abrupt, so I'll put it the second. As we have the guidance till 2030. Does this mean you're gonna stay with us for the next 4.5 years? Thank you.
Let's go Manus first. I'll think about that. I'll think about that second question because it hadn't occurred to me that that might come up. Okay.
Thank you, Kunpeng, for the question. Look, we don't give ROTE by product. I know some of you have asked that in the past. It is complex to give ROTE by product because the reality is that we look at our ROTE on a client basis and on a full relationship basis. Looking by product is not right. Hopefully, what you'll be able to take away from the presentation is that if you look at our CIB business, it's like the rest of the group. We'll see its growth driven more likely by the engines of non-interest income. We would expect the banking business, the markets business to continue to grow more quickly. You've seen the good growth there. We think that will continue.
Of course, within WRB, we expect to see our wealth business continue to grow, at a double-digit rate, as you'll hear from Judy a bit later on. Those are the trends that both underlie the group. They underlie the improvement in ROTE within those divisions, and they're what we're comfortable in going forward. I would just caveat that because I'm now a CFO, and I need to caveat things, that it is based on the current interest rate outlook. We're using current curves for that. Of course, that could vary.
To your, to your second question, Kunpeng. The, am I gonna be around to deliver this plan? Let me say what I'm going to do for sure. None of us can control perfectly our destiny from day to day. The, number one is, we're gonna take the team that you're gonna see today and on Thursday, and that you're, that you're seeing from time to time, and continue to strengthen that as a team. I think where we are right now. This is obviously my personal opinion, but where we are right now, especially with the addition of Manus as a CFO, it's the best team that I've had the pleasure of working with in Standard Chartered. I'm not saying that everyone is better than somebody else. I'm saying that as a team, it's exceptionally capable.
This team, to different degrees, has been driving the improvement that we've had. I want to really lock that down. Second is the delivery of this strategy. There's no major step change in the strategy that we're laying out in these three days. What we're doing is taking a step back and saying, "This, the direction of travel that we've been undertaking and enjoying, we'll carry on, but with the need for very, very significant ongoing modifications, in particular, as the state of the world changes. Those external conditions. We think the strategy is quite clear. It's working for us. Really wanna bed this down and make sure that we're in an excellent position to deliver that 18% in 2030.
You know, I can tell you, in 2030, if we're generating 18%, I'm not going to be doing high fives with the team. I don't think that that's the potential of this bank. I'm not allowed to say that because, you know, the slide says 18%. Around 18% by 2030. This potential of this bank is far greater. I want to do everything that I can to make sure we land that. And we have, obviously, new members of the team, not least Manus, that I want to make sure are completely bedded down. The final thing is, I would really like, when it's time for me to hang up the spurs or get my spurs hung up, that the next CEO comes from inside Standard Chartered. It I can't control that.
It won't be my choice. All I can do is prepare the team to the greatest extent possible, giving people the best opportunities. I think we have that talent inside our bank. The board will always, when they come to that, review the external marketplace, as we did for CFO, which is why we only announced it yesterday. Whatever we might have thought the outcome was likely to be. I'm not taking anything away from what I think the board will do, but those are my objectives. Can I get that done in 6 months? Definitely not. Do I need 10 years? Definitely not. Someplace in between. Actually, Chris, you had.
Thank you. Eric Sheridan from Goldman Sachs. Just one question. It feels as though perhaps the core message so far is you're sort of, in this event, asking shareholders to entrust you with a license to redeploy additional capital into some growth opportunities as and when they may become available. I suppose you'd consider that as already in Q1, and that would naturally cause a pivot in the way that share the capital is distributed versus invested. With that in mind, it sort of begs the question, how big is the growth runway you can see? Perhaps more importantly, as you get to 2030, you've got the 18% target. When does that become a question of what you could do versus what you should do?
Because you, the leadership team and the board need to think about, you know, do we keep going and try and maximize some returns, or are there, broadening of the product suite, is there EVA opportunities that are maybe 17.5%, not 20%? Where do you try and balance that ROTE maximization versus what's right for the 5-year forward of the business coming from this?
It's an excellent question, and it's definitely the framework that we're considering. We're already making ROTE versus EVA tradeoff decisions, right? I mean, we've got a wealth business with a super strong ROTE. It could go further and further. If there are, and Jinyu will talk about this. If there are opportunities to deploy capital around that opportunity to generate meaningful EVA that may not take the ROTE from 35% to 45%, that's still good for shareholders. The mindset is already there in terms of the incremental decisions that we're taking. I think you're asking at what point does that sort of flip the area, the center of focus for the entire group.
Yeah.
We'll get there, right? We'll be watching that very carefully. I think we've executed in a very disciplined way. We will continue to execute in a very, very disciplined way. Manus.
The driving focus will continue to be to grow income and increase the risk-weighted assets. Let's not take away from that as a very important focus we want to look forward to. I would just add to Bill's comment. You mentioned Q1. I think the point about Q1 demonstrates that quite nicely. We grew income year-over-year significantly faster than we grew RWAs year-over-year. All we're saying is that we see tremendous opportunities within our footprint to generate very strong value, and we have opportunities to deploy our capital to do that, and we will do that in service of delivering that 15%, greater than 15% ROCE and driving up towards 18%.
I look forward to the debates about at what point we should stop and maximize on EVA, but we've got a way to go.
Yeah, we do. I wanna go back though to when we talk about growth, we inevitably are first drawn to income growth and the areas of profitable income growth. One of the great enablers of our growth is gonna be what we have done and are doing on the infrastructure side. You will obviously talk about that in the context of transformation. The opportunity for us to take these really, really solid foundations, and you're gonna have to form your own views just how solid they are. We think they're exceptionally solid at this point. To be able to deploy capital, deploy resources quickly and with super normal profits by virtue of the underlying infrastructure that we've built. I mean, you work at Goldman Sachs. You have a reputation as a firm for having done that for a long time.
I won't say that that's a role model. I don't think we're that far away from being recognized as a player that can deliver a best-in-class infrastructure that allows very aggressive tactical reallocation of business lines and capital. You'll form your own views how close we are to that, but we feel pretty good. That's at the heart of what Noel and Tanuj Kapilashrami will be talking about. That will absolutely enable growth in ways that we couldn't have imagined growing 5 years ago or maybe even 3 years ago. Let's go to the back there. I can't see the faces all the way.
I can see Ed and James at the back.
Why don't we start with Ed?
Great. Thanks so much indeed. It's Ed from KBW. I think one area I was very interested in hearing about was financial institutions and sort of non-bank financial institutions, and that seems to be a very big area of growth for you and emphasis. It's also an area where I think a number of regulators have expressed concerns, and I guess a big number of market concerns about what's going on in some of those areas. I just wondered if you could give us a little more color about what exact areas of growth you're seeing there, and what sort of competitive advantages you see that you have, and perhaps how you're navigating some of the risks that do seem to be out there. Thanks so much.
That's great. No, thanks for that question. Roberto will be talking about that in some detail when we get to the CIB section. The non-bank financial institutions is a pretty broad swathe of activity. I think maybe at the beginning of your question, you probably had private credit in mind, and that's, you know, obviously it's been a lot in the press. We think and have thought for some time that the extension of credit from things other than bank balance sheets was absolutely inevitable. It happened in the U.S. for decades. Now it's happening in a slightly accelerated way. It happens, you know, more recently post financial crisis in Europe and Asia. It's happening for good reasons, and we are leaning into it.
We're also leaning into it very cautiously. I mean, we Jason, our Chief Risk Officer, is here, who will be available to answer these questions if you want to get an offline perspective as well. We don't have a big proportion of our loan book to private credit companies. We don't provide a lot of back leverage to private credit portfolios. We do a bit of each. We do some subscription line to underlying funds. Mostly what we do with the private credit companies is we originate credit and sell it to them. Sometimes we sell it clean, as in the way we bought it. Sometimes it gets restructured or sliced or diced in some way.
We do that because they've got a lower cost of capital than we do in some areas, or they're just a better bid for some other reason. That is something that I think is an actual. We've seen the mood music change in regulation. The U.S. obviously has gone from seeking to add a material amount of capital to U.S. bank requirements, but kind of back down to where they started. They haven't gone backwards. The U.K. and Europe have also stopped advancing the capital engine, as it were, but they haven't gone backwards. I don't think we're gonna see big releases of capital via regulation, I don't think we're gonna see a big increase in cost of capital from the non-banks on the back of the credit cycle.
They may converge a little bit, but it just makes sense for credit to reside in the hands of people that aren't carrying a lot of leverage and that aren't undertaking a lot of maturity transformation. That's not a bad thing as long as we can continue to originate credit and distribute it. Insurance companies are kind of the same thing, but obviously under a different regulatory umbrella. Insurance companies have reasonably complex operational requirements, and we are, amongst many other things, an operational bank. We have very deep relationships with institutional asset managers, represented by many of the people in the room, insurance companies, pension funds directly, sovereign wealth funds globally, who need us for operational reasons. They need us for acquisition of assets.
They need us for managing of risk associated with their portfolios in the markets where we operate. You know, we needed to build quite a strong service infrastructure around those non-bank institutions. We were very poor 14 years ago, and I've mentioned in this kind of grouping before. You know, 1 of the very large asset managers of the world, who's I happen to know the principals quite well, said to me on my first day in Standard Chartered, or the first few days, "We rank our broker-dealers. You're 17 out of 17, and frankly, you're only in the list of rankings because we have to deal with you because of the markets where you operate. Otherwise, we wouldn't be talking to you at all." That's very helpful.
You know, "What do, what do we need to do to get into your, you know, top 3 or 5?" Excluding equity trading, which we don't do. I tell you're gonna have to handle the inclusion of multiple funds for a particular trading strategy. You're gonna have to cover the markets where we operate. You're gonna have to have an account opening and compliance regime that doesn't incur massive amounts of brain cell lossage every time we talk to you, et cetera. We invested very deliberately for years after that. We're now top 1, 2, 3 always in the markets where we operate, and top 3, 4, 5 in G10. Ex equity trading. Through operational improvements and then the hard work and personal relationships developed by our relationship managers.
None of that came easy, but it was very deliberate. You know where did it start? We heard from customers what they wanted us to do, and then we did it. Not different than what you'll hear from Judy Hsu. The customer improvements, customer satisfaction improvements in wealth management during Judy Hsu and Ben's and Mary's time running that function have gone from bottom quartile to number 1. It didn't happen because we had better products. It happened because we invested in customer service and customer satisfaction. For non-banks, being relevant, understanding what they want, originating product for them, providing the ancillary services that come along with that, and then continuing to grow. Okay. Joseph Dickerson.
Yes, thank you for taking my question. Joseph Dickerson from Jefferies. Hi, thank you for taking my question. Joseph Dickerson from Jefferies. I thought it was very interesting the point you made on the efficiencies that come from the liability services.
Yeah.
This is the first question. What deposit growth have you assumed over this plan? Is it roughly in line with the income growth? There's clearly a very favorable trend from the mainland, particularly this year, in terms of deposit maturities and so forth, which could make their way south of the border. Just what's the deposit growth there and could there be any scope to augment the 50 basis points? I'm sure this will come up in another session, but you mentioned in the release today the migration of some of the WRB clients into Mox. You know, what is the, across the franchise in WRB, what is the opportunity to, for lack of a better word, push clients or transition with them into digital banking?
Is there a broader opportunity in terms of ROE and income here for the bank?
Just quickly, Judy's gonna cover the 2nd question very directly in her comments, so I'll save that for her. You know, you've seen a changing composition of our retail business. Obviously, there's the 70 up to 75% of income coming from affluent. You've seen a very aggressive reshaping of our mass market portfolio, including the investments in the digital banks, but also the divestitures of a number of the mass market businesses across in particular our smaller markets, which is ongoing as we speak. You've also seen asset dispositions of unsecured loan books and asset pools in India, Korea, et cetera. We'll continue to optimize there.
In Hong Kong and Singapore, you're seeing a migration of unsecured assets into the digital banks. Lower cost to serve. Surplus deposits in those entities that can deploy effectively into those asset bases. This is all in the spirit of ongoing optimization, but also recognizing that in some very important markets like Hong Kong, mass market banking is very profitable. In its own right, we have a good position. We want to make sure that we grow that. Again, I don't want to take too much away from what Judy is saying. That sort of leads into the whole deposit question.
Yeah. You'll note, Joseph Dickerson, that we haven't put out loan growth targets or deposit growth targets for a reason. Because we see those as outputs rather than inputs to what we're going to achieve as we seek to move our business to improve return on risk-weighted assets going forward. Your assumption about what underlies the plan will be broadly correct. Within that, you should assume, as I was implying on the slide, that our WRB base will grow somewhat faster than our CIB deposit base. Actually, on that side, it may be worth just asking our Treasurer, Daniel Hodge, who is here, Daniel Hodge, if you want to say a couple of words about future expectations on how you think that will impact returns.
Thanks very much for the question. I mean, I completely agree with that. We're not giving overall targets for growth in the funded balance sheet, but it's very much a mixed improvement. What we're saying is that the 50 basis points is coming from two areas. Firstly, the weighted average cost of funding of our liabilities is going to fall. That's because we're actually growing all sources of funding. Don't get any impression we're starting to shrink corporate, cash or wholesale. We're growing them all. We're growing the cheaper, more stable retail funding at a faster rate than the other sources of funding. You get that mix enhancement.
Because you're growing sort of the more stable deposits at a faster rate, it means you actually need to hold less liquidity per dollar of funded balance sheet. Obviously, the average treasury asset is going to yield a lower spread, and therefore lower sort of NIM than the average commercial asset. It's a combination of those things together that generate 50. Can we do more than 50? Obviously, we'd like to, and we constantly seek to try and optimize the balance sheet and sort of the volume and the mix of our funding and what we do with our funding across our various legal entities.
Great.
Good morning. It's Frank Jameson City. I'd just like to come back to capital allocation. If you focus on slide 35
Your usage of capital over the last 2 years versus the indicative use of capital going forward, it is quite a marked step change. You're obviously very heavily weighted towards buybacks, and now talking about this third mix. Just in terms of RWA development from here, is it because you think you've already transitioned to a more capital light and efficient model and there's less to do on RWA takeout? Or is it because you see more opportunistic ways to deploy the RWAs going forward? I'm just trying to think of the gross parts of the RWA equation. Then the second part to it, I appreciate there's nothing inorganic in the plan, but at the same time, I think this is the first time I remember you explicitly calling out in the slide as a potential.
Can you just talk to that high hurdle rate, where you think the obvious gaps in the potential are, et cetera, et cetera.
Let me start, and Manus will definitely fill in.
Okay.
I mean, we had $80 billion of suboptimal RWAs when we started this. We're down into the, you know, depending on how you look at it, the nine to 19 range. Some of that is just stable. There's always gonna be an in and out of clients that haven't generated strong returns over the past three years, but that we are happy to continue to invest in. We can definitely squeeze a bit more out of the lower returning RWAs, but that's just a matter of hygiene and ongoing discipline. I think it's very well embedded. Roberto will talk about that. There's not a huge opportunity to, you know, expunge big chunks of RWAs in the ordinary course.
Obviously, we could divest things, and then some of the mass market retail divestitures are expunging some RWAs. They're not low returning. They're high returning, and we're getting paid a premium for those assets as it happens. That's not really the point. The opportunities to deploy assets are quite interesting. Right now, obviously, we've had some mini wobbles in the market on the back of some of the, you know, the private credit noise and the couple of frauds that have caused spreads to increase a bit, but spreads are still quite tight. The, you know, the deployment opportunities are likely to be episodic and, you know, and idiosyncratic.
We've got the capital to deploy there if we want, which is why we give ourselves some breathing room. We're only going to deploy capital into RWAs if we're getting a good return. I mean, there's nothing that we have to do. Those are just opportunities, and that's why Manus refers to available capital being deployable into a number of things, including RWA growth, if we can generate creative returns. In terms of the inorganic, I think we went to great lengths. Of course, everybody would want to know exactly what the criteria are. We kind of will know it when we see it, we know that the bar for strategic relevance is very high. We spent a lot of time focusing our bank into things where we see core competitive advantages.
Highly unlikely to deploy capital into something that isn't directly related to one of those core and tried and tested competitive advantages. We further said that we are very happy to buy back shares at anything like this price because we see, as we guided you to an 18% return on tangible equity, from 11.9. We think that the market is pricing in something a lot closer to 11.9 than 18%. That's a kind of simple observation. We would love to own more and more of our shares. Something inorganic would have to exceed the financial returns and be strategically relevant. If we had something in mind, we could talk about it. We don't. Beyond that, it becomes hypothetical.
It may be the first time you've seen it on a slide, Andy, but it's not the first time that we've said it. It's a statement of what we've been saying previously. There's no change in our position. Just 'cause it's on the slide, don't assume there's any change. In direct answer to your question on RWAs, I think it's both, really. It is because, as Bill said, we've been very successful in driving down the level of suboptimal RWAs that we've got on the bank's balance sheet. We still have more to do. We'll always have some suboptimals, but we will continue to work on that. That pool of suboptimals is somewhat lower, and it's because we are more confident in the outlook. We are more confident of being able to see ways to deploy our capital.
Just to be clear, again, deploying capital is not the objective. The objective is to maximize growth and returns. We will use the capital to do that in any way that we can. We have regular conversations at a client level, at a business level, and at a bank level about how we can make ourselves more efficient, both in our new business and in our existing business. Deploying capital is not an end in its own. The end is driving the business forward in the maximum value generation way possible.
Yeah. Let's stick to the front row.
Thank you. Simon from the Arab. Another question on capital, but this time on the CET1 target, which you kept with 13 to 14, which I guess was expected.
Yeah.
Talked about more broadly being comfortable in the middle of that range on average, rather than slightly above it. The context here is some U.S. banks have obviously seen a reduction. We've had the Bank of England talk about changes, but without necessarily moving things materially at this stage in terms of the real core requirements. I'm thinking out to 2030 and how much we think of that target as very much it's gonna stay there, or whether it was sort of considered that you might super it more, or whether there's much you would need to see from the regulator before that target could be shifted down slightly. Thank you.
We actually have a fair amount of capacity above our regulatory minimum. Yeah, we have quite a large buffer. That's part of what gave us comfort going being more actively dynamic throughout the 13%-14% range. We just reset that verbiage around our capital range. We're unlikely to change that anytime soon. We are perfectly comfortable, as we've already demonstrated, going down into the bottom half of the range. It's not because the world is a perfectly wonderful and peaceful place. I mean, there's plenty of scenarios that we could worry about.
We think that we've built in a resilience in our business that allows us to be just much more dynamic than we have been. It'd be interesting as we go out to 2030 and we imagine the kind of capital generation around an 18% return on tangible equity, and the business mix shift that we've indicated quite clearly in my and in Manus' comments, and it will be very clear through the subsequent presentations. That structural business mix shift also makes the bank much more resilient. Manus made the point about the lower risk profile of the bank. A more resilient, bigger profitability buffer and, you know, different mix shift, higher quality and mix shift business may very well allow a structurally lower level of capital to be run. It's not in our models.
It's not something that we're guiding to, but it's when we're thinking about upsides from here, that's certainly one source of upside in terms of incremental capital returns. It just comes from the fact that we will have built a more resilient business.
It's not Just to clarify, the assumption out to 2030 is the midpoint of the range. We continue to have that within our model.
That's what I tried to say.
Just clarify.
Good to clarify.
We will be around, obviously. Please, if you don't get a question now.
We'll I'll just break the rules. We'll go Gian and then Pearly, and then.
Yeah. Thanks for taking my question. One is on cost. You clearly outlined some further opportunity on cost. I'm just trying to see if you can unpack cost a little bit more in terms of how we think about cost inflation, hiring, and the offset around that. Also platforms. I'm quite interested. Are you done with back office platform or middle office platform? Are there further investments to go? The second question is regarding more second order effects from the energy crisis that you're seeing because you operate in a lot of countries which are energy deficit countries. I'm just wondering how what risk you see in those countries and how we should think about the risks going forward, impacting you in particular.
I'll give some quick answers because we've got a whole section in transformation that Noel and Tanuj are going to take us through. There is more platform investment to go, but we've broken the back of the major infrastructure is in place. We have some fill in to do, including completing the rollout of our core banking platform to places like Korea and Taiwan as the significant two remaining markets. I think that there's an obsessive cost focus. There's for me, and I know there is for Manus, but also from the rest of the management team in terms of becoming a more productive company. It's not about cost cutting. Although that will be the result for sure.
It's about having a structurally more productive environment that is fit for future, given the financial markets and the, and the financial infrastructure world that we're going into. It's, you know, design right in the first place and then allow for genuine scale and growth with nonlinear cost increases, like far less. That's an obsessive focus because we know that in this agentic commerce world and the digital money world, margins are coming down. Margins are always coming down in our business, but they will come down faster than in the core plumbing businesses in a completely AI-driven agentic world. We have to be ahead of that. There's an obsessive focus. I think we can win in that race. Obviously we have to do that.
The second question.
Geopolitical risk.
Yeah. Yeah. We watch very carefully the the the the global macro impact of structurally higher energy prices. Obviously it's driving inflation, which is leading to higher interest rates. We're seeing that in every market. We're seeing a pickup in inflation. You know, up to a point, that's a helpful thing for us. Beyond that, it becomes obviously growth suppressive and negative. Then we're looking at the vulnerable, the particularly vulnerable parts of our footprint, where higher energy prices are taking what was in many cases a fragile recovery from the kind of the restructuring, you know, post-COVID, you know, in increased inflation periods, higher interest rates. A number of the markets in our footprint were beginning to recover. It's more challenging for them.
We don't see anything that's flashing red, but there's plenty that's amber that we're watching and calling that out along the way, Manus.
Just to add on cost, we've given you our guidance for 26, which I should have made sure you'd seen the back of the pack, but that remains unchanged. Really we have a wonderful session coming up with Noel and Tanuj to talk about those platforms more, so I'll leave it at that.
Last but not least.
Hello. It's Pearly Yap. I could just be loud enough. Pearly Yap from Bank of America. Just a quick follow-up on cost. AI investment. It looks like a lot of your cost planning is based on productivity and probably helped by AI. I think it's probably fair to say that as a sector, we're still quite early in the AI investment cycle just because how quickly things have moved on. How are you thinking about that investment piece? I can't help but notice that Fit for Growth, we still have about a third left of that. How much of that would be potentially earmarked for AI type investments? That's number 1. Number 2, very quickly on wealth. I don't think there is a debate that the wealth flows are coming and coming pretty fast.
In terms of the channels it's coming, so far we've seen a lot of growth from mass affluent, it looks like, you know, a lot of people are now talking about generational wealth transfers and family offices. How do you see the different segments of the wealth flow coming through? To tie that into the AUM, I've noticed that you've brought forward that new steady money piece, which is about $50 billion per year average now.
Yep.
Which is actually quite similar to what you've done in the last 5 quarters average. How do we think about the margin piece? You know, if you're doing similar amount of net new money, mechanically, you would expect, you know, the income growth to slow down. In Q1, we've seen a big step growth. How do we square that piece?
We're gonna kick the growth question entirely to Judy. I think we've given the high level. You understand our conviction, and we'll get to that. Look, we've not broken out an AI cost number because having built this, the platform that Noel will describe in just a few minutes, the AI is now embedded in everything that we do. In almost every process, almost every productivity program, almost every revenue investment has an AI component. It's almost meaningless at this point to say, you know, what are we investing in AI? It was not meaningless to get the infrastructure layer right in the first place. That was a meaningful investment. It's built at this point, and it's working.
As Noel will say, there's hundreds of models that are operating on that platform, and billions and billions of tokens being processed in the various use cases. AI will be centrally important to the productivity initiatives from here as well, both from a diagnostic perspective, identifying the inefficiencies and vulnerabilities, but also in automating process and removing, you know, burdensome either human or machine interventions that can now be done much more efficiently through a gen AI machine. Noel and Sunir are gonna talk about that in some detail. Let's just save that for them.
On the Fit for Growth program, we remain committed to finishing it this year. The numbers are as we've guided to previously. We will stick to it. There's been no question of redirecting those funds into some other way. It's a discrete program which we've talked about. You'll hear, and this is a good tee up for the coffee break in the next session about how we are turning the learnings from Fit for Growth into a muscle that we're using going forward.
That's great. There will be more time for interaction and more time for questions. You'll have all of our colleagues on the management team available during their presentations for some of the deep dives. Let's carry on. Next up, David, are you gonna compare us and direct us?
Yeah. We're gonna be There we go. I'm done. We'll be back here at 10:45. Welcome back, everyone. We're now gonna move into our transformation session. I'd like to invite up Tanish and Noel. Thank you.
Good morning and good afternoon, everyone. Good afternoon to the ones joining virtually. I did check there are some colleagues joining from Australia today. Thank you very much for joining us. I'm Tanuj Kapilashrami. I'm the Chief Operating Officer. I'm joined by Noelle, our Group Head, Technology & Operations. In my role, I look after strategy, transformation, and our corporate functions. I've been in financial services, specifically banking, for over 25 years. I've had the great fortune of living and working across many of our footprint markets, including lovely Hong Kong. I'm delighted to be talking to you today about our transformation journey, both what has been delivered and what's gonna happen next. Bill started the session today by saying that Standard Chartered has a very clear ambition. We want to be the world's super connector.
Not just a global bank, but a global financial network connect solving for cross-border needs of our clients, connecting capital, trade, payments, across the network in a world that is becoming increasingly fragmented. Delivering on this ambition requires more than geographic reach. It requires an operating model encompassing people, processes, and technology that is interconnected and purpose-built. An operating model that can be scalable, reusable, and is standardized. That's what I'm hoping we are gonna be talking to you today. The world is not standing still, and neither is our response. Our transformation is not technology-led for the sake of technology. It is strategy-led with increasingly sophisticated interplay between people, processes, and technology to deliver very differentiated outcomes for our clients, colleagues, and for our shareholders.
Noel will get in a minute to talk about the tech architecture. I really wanted to highlight the fact that this is not just a tech story for us. It's a process, people, technology story. That's one of the key reasons why Noel and I have chosen to do the session jointly today. I want to be clear from the start. Bill said this as well, that this is not a defensive cost action for us. Our whole transformation agenda is about creating operating leverage to deliver exponential growth. That's the objective of our transformation work. There are cost targets that I'm going to get into, which is an outcome of the work. That's not the real objective.
A lot of the work that we are going to be talking about today is the work that's already been done, which is enabling growth and how we feel by enabling AI on top of it, that growth is going to be delivered further. The other thing that Bill said, which I want to double click on, is that we are a global bank. We don't have one or two home markets. Our network is our home, and that is one of our biggest structural strengths. To build a model of an operating model that leverages the value of the network to deliver on our super connector aspirations requires a response, which is a very distinctive response.
Like I said, we are, going to be telling to you today the investments that have already been made, the outcomes they have, achieved, and what happens next, especially with the advent of, AI. At its heart, our ambition is to deliver a bank that is simple, connected, and fast. Simple means global core platform, fewer variants, and standardization where it creates scale. Connected means shared cross-border capabilities that serve multiple markets. Fast means executing at pace, but Jason will love this with very clear guardrails. That is simple, connected, fast. We're going to talk about simple, connected, fast a lot, today. We are not measuring our transformation just by program volume, KPIs, and the sector. We've got very clear financial metrics, that we are linking this to very clear commercial outcome.
A 20% increase in income per employee by 2028, 15% reduction in our corporate functions headcount. This is technology operations, all of our support areas, resulting in ultimately a structurally lower cost base, so a cost-income ratio of 57% by 2028. Our transformation is not new to us. This has been a journey that's been on. You know, the first slide that Bill flashed today in his presentation outlines the financial outcome. We started our transformation by attacking our operating model because we firmly believe that technology follows operating models. If your operating model is complex, technology will be complex. I think candidly speaking, if you go back a couple of years, we did operate in a matrix with a very strong local orientation. What that did for us is resulted in duplication, inefficient capital allocation and unscalable investment decisions.
One of the big pieces of work that's been happening for a long time, predating FFG but accelerated by FFG, was the work that we have done in simplifying our operating model. We stripped out regional layers, radically simplified our executive and leadership bench, and clarified decision rights between our global businesses and market leaders. To just give you a sense of numbers, we moved in my time in the bank from 8 regions to 4 and now 3. We've got our market CEOs double-hatting with 1 of the 2 global businesses. Today, almost 80% of our market CEOs double-hat with 1 of the 2 global businesses. One of the big changes we did was align all of our markets to 1 of the 2 global businesses. This is not just a reporting line change.
This is the way we do capital allocation, this is the way we report on performance, this is the way we take investment decisions. This has been a pretty fundamental change. What this has done, and again, not just to cost outcome, what this has done for us is accelerated decision-making. It's reduced the path to decision-making. What it's also done is brought accountability much closer to our clients, and that's been the two big outcome of the operating model changes that we have done. One number on this slide I want to double-click on is the size of our workforce in our global capability centers. We call them GBSs, Global Business Services. 43% of our headcount now sits in one of our capability centers. This is not just a defensive cost action play.
What it does for us is by co-locating a critical mass of our processes and people, it puts us in a position to be able to standardize, automate and deploy AI at scale. It's far difficult to do when you're trying to do it in a much more geographically fragmented model. These organizational changes have been the foundation of everything that we have done till now. With that, I'm going to pass on to Noelle, who's going to talk about modernization of our tech architecture.
Thank you. Hello, everyone. Process of elimination, I'm Noelle. Here's the good news for you today. Bill and Manus were so excited about the talk that I'm about to give that they gave a good portion of it already. What y'all know is we have VCP in our management team in case anything happens to me up here, we know they can step in. I've been in technology and operations for a little more than 30 years. I've been leading change across technology cycles and across multiple organizations in different sectors. I know when you hear the word transformation, sounds a bit lofty. Maybe there are a couple of skeptical people in the room.
What Tanuj and I are gonna share with you today, I think is a very, based on my experience, is a very credible story about people and technology coming together and changing what this bank is capable of doing. Okay? I'm gonna start by talking about significant work that's been underway for the last two years. Bill talked a little bit about it, Manus talked a little bit about it, where we have been modernizing our technology foundations for resilience and growth, and that work is now starting to pay off. Bill talked about our journey in cybersecurity and our journey in financial crime or anti-crime. We then focused on three additional pillars, and all of these things together form the very core of this bank. Okay?
Those three critical pillars are what I'm going to talk to you about for the next few minutes. First, in the fourth quarter of last year, we completed our global private cloud. We now have 10 times the processing horsepower that we had previously, and we have geographic resilience against domestic disturbances, data center outages, sub-sea cable disruptions, climate issues with unprecedented levels of automation. We have redesigned and rebuilt our connections to third parties. We use a concept called abstraction, which means that we can move them to any location. Put simply, we can be in any market quickly, in any market with internet access. That's the first thing. I want to pause there for just a moment because that wasn't just a feat of engineering. It was actually a feat of engineering.
To have a global private cloud, to have geo-resilience and to have third-party flexibility the way that we have it, is really quite differentiated and very, very important for a network bank like ours. Second, in March of this year, we migrated our largest market, which we're all sitting in, Hong Kong. From the mainframe to our global core banking platform. We now have more than 90% of our markets on a single platform. What that means is we can build, we can test, and we can deploy code much more quickly. Because we own the source code, we are no longer beholden to third-party roadmaps or geopolitical tensions. We can and have started integrating digital assets, blockchain, and AI natively on our own terms at commodity prices and sustainable scale. That's the second thing. Third thing, our modern payments platform.
We're at the infrastructure, core banking, now we're up at payments. Payments is an out-of-the-box service offering the same levels of choice and service excellence consistently across markets. What this means is that our businesses can open new digital services, new payment corridors, and facilitate trade quickly and easily. Those are the 3 things that we've been focused on for the last several years. Significant investment has gone in, and you might be able to tell that we're quite proud of them. These systems are future-ready and resilience is built in, and I'm going to give you 4 reasons why that's true. First, they're commodity-based. What that means is they're scalable, they're standardized, they're performant at the best possible price. Second, they're cloud-native, so we are significantly moving away from mainframes. Third, they're API first, so no more bespoke integrations.
Last, the source code is owned by us, as I already mentioned. We did not set out to rebuild everything everywhere all at once, even though there might be somebody in the room who published that paper just a little while ago. We focused on creating operating leverage for the bank by targeting the systems, modernizing the systems that all of our products rely on. We made them industrial-grade and future-ready. Okay. We can extend up above that core where differentiation matters at the client interface level. Okay. We're standardizing it at the core, and we're differentiated at the client edge, and the balance between the two is critical. Okay. Standardization gives us speed and efficiency, and specialization and configuration gives us new products, new services, and new experiences for clients. Our transformation program it's it doesn't have an end date. Okay.
It is increasingly the way that we operate. We've gone from large, infrequent releases to small, frequent changes every day. Feedback loops, whether they're customer, operational or risk, are built into these platforms. Data is not an output, it is a live signal. What that means is it streams and it's analyzed in real time, and it drives decisions, and it drives improvements every single day. Let's talk a little bit about the results we're seeing from all of the work that I just described. As Tanuj mentioned earlier, we've been on a continuous improvement journey. Over the last couple of years, we've seen a 30% improvement in operations in throughput per FTE. Our digital services are now always on in any market, 24/7.
We've seen a 9-fold increase in transactions processed per second, supported by, as I mentioned earlier, a 10x increase in processing power. Our downtime has been reduced by 80% while run costs have remained flat. We think our results are getting better. We expect more. As you probably heard from Bill, we're constructively dissatisfied fairly frequently. The key point is this: scale, speed, and resilience are no longer constrained by linear cost increases. For Network Bank, that's pretty transformational. That's our modern foundation. Okay? Now we're going to talk about the people and processes that sit on top of it and bring it to life, because tech for tech's sake is not what we're about, right? We are an applied technology company, and people and process bring this to life for us. Okay.
Thanks. Thank you, Noelle. Continuous improvement is a word that we have spoken about quite a bit. Our transformation is not a program with an end date. We were transforming before Fit for Growth, but Fit for Growth was a very important accelerant. We can pick up your question when we get to FAQ later today. We are on track to deliver $1.3 billion, which is going to be a 1-to-1 ratio in terms of spend and cost save. Over 300 initiatives across all parts of the organization, driving improved customer experience, increased trade through processing rates, much faster turnaround time on our applications. Perhaps what's been less visible on Fit for Growth is the amount of investment we have done in securing our plumbing.
I wasn't going to use the word, but then Bill used it in his opening, so I am going to use it. We have mapped 100% of our processes in the organization, and we have mapped a consistent set of skills that underpin all of those processes. That roadmap, heat map, blueprint that we have developed becomes incredibly important when we talk to you about AI deployment going later. 100% of processes mapped, consistent set of underlying skills set are mapped, which gives us a very good sense of how work gets done. Some really clear outcomes on the slide. 53% straight-through processing, increase in wealth solution. What's not here is a 10% reduction in our technology estate that has happened because of all of the work that we have done.
What Fit for Growth has helped us do is build that muscle of continuous improvement. It's not just a one-off efficiency gain, but a muscle that sort of sustains beyond the program, which is going to finish by end of this year. Moving on, you know, we call this the bridging slide because we will talk about having secured the foundation, what happens to us next. I will go back to why simple, connected, and fast is not just a transformation tagline for us, it's an economic logic that helps a super connector bank deliver to its full potential and beyond. Again, I've said this a few times, we are not anchored to a single market, and for us, that's a structural strength. That means we are not constrained by one growth cycle, one domestic balance sheet, one regulatory environment.
Quite the opposite. We are very well-positioned to be able to capitalize on opportunities that arise anywhere in our network. To do that, we do need an operating model which is simple, connected, fast, which basically means we want to scale without multiplying costs. For that, the bank has to be simple. To harness the power of our network, the bank has to be connected. To do this safely and repeatedly at the speed required across the bank, across the globe, the bank has to be fast. What that does collectively for all of you is high income growth, greater operating leverage, and a much and a workforce that is much more upskilled to be able to compete with the future direction of the bank and it competes with the future of banking.
Like I said, not just a transformation tagline for us, but an economic logic that helps the Super Connector Bank deliver on its aspirations.
Let's go just a little bit deeper into how we're transforming to be simple, connected, and fast. We've modernized our technology through a simplification approach that retains functionality. Standardized at the core, differentiated at the client edge. Our principles are straightforward. Build once and deploy across markets and businesses. Differentiate through configuration rather than custom code. Reduce fragmentation. This lowers the unit cost to serve, it improves resilience, and it makes growth more scalable, easier to achieve. Let me let me just give you a couple of examples to try to bring this to life. The first one is the one I've mentioned already. Standardizing on commodity infrastructure, 1 pattern across the estate. 2, we have a single identity and access management layer for Standard Chartered. 3, we have 1 payments backbone for the company.
Fourth, we have a single enterprise AI platform with reusable services. We built in operations. This is a good example. We unified over 100 applications into 30 standardized workflows accessible for our operations people through a single user interface. Over time, that interface becomes a single pane of glass to manage client onboarding, servicing, risk and governance workflows, and more around the world.
What it really means for a client is that a capability that we build in one market, let's say a real-time payment solution, can be deployed in multiple markets at fraction of cost and in a far more speedy deployment way. That's the real value of the model that we are doing. We are constantly simplifying, standardizing our processes and data. A lot of that leveraging our Fit for Growth investments has happened in our capability centers. We have demonstrated reduced timelines, more efficient processes in our KYC onboarding customer due diligence processes.
We talked about simple. Now we're gonna move on to connected. Okay. The power of a super connector is in the connections. A super connector creates network value, so a single capability can be reused across clients, products, and markets. Our platform architecture is designed so that one client engaging with us in a single product in a single market has access to our full capability globally. Trade finance will link to payments, and cash management will link to foreign exchange. The client doesn't see seams, they see a network. The real unlock over time is deeply integrated clients and transactional data, which gives us advanced analytics, more precise personalization, more seamless payments across geographies, more straight-through processing for our teams. That reduces friction, it improves the client experience, and it helps our businesses deepen relationships with our customers.
Basically what happens is clients don't see product market boundaries. They see one Standard Chartered. At the beginning of the slide, when I spoke about the work we have done on our global capability center, that's a really good proof point that helps deliver on connected, because by centralizing processes and people in big shared service centers, we are able to drive that connectivity across the network. Which was not possible in a geography by geography model. A really good example of leveraging our shared service centers to drive that level of connectivity.
Agreed. We've talked about simple, we've talked about connected. The two together have a multiplicative effect on making us fast. Okay. We're not just digitizing. We're building the capability to operate in a fundamentally different ecosystem. Bill talked about it this morning. Agentic commerce, the digitization of money, the speed at which financial services will move, I think in the not too distant future is something that we are preparing ourselves for. The winners will be those who can sense, decide and act in real time. Dynamically changing products, dynamically managing risk, and strengthening with scale. The most important part about this ecosystem from my perspective, and perhaps this is somebody from technology talking, is serving customers has to be quick, easy, and fast, whether they're human or machine, right.
Always, and we've referred to Jason in this conversation, he happens to be our chief risk officer, always with the guardrails that this industry requires. Architecturally, we've separated our foundations from our product delivery, we're running those foundations as utilities. Our run costs are predictable, time to market is faster, and scaling across borders is easier. One example for you, in technology delivery, we've moved from 18 manual approvals to get code across our markets to clients. We now have an automated pipeline-based process. That's the from to in the kind of ecosystem we're building. We're preparing all of these systems for AI by rolling out standards-based APIs across them all. What that means is that these systems can be orchestrated by humans and by machines.
The result, our product owners can make changes much more quickly and be able to respond to the dynamic markets that we operate in.
In summary, simple reduces friction and risk, connected removes latency, and together they multiply, so we can execute much faster at scale and with the right level of control. Just leaving you with some numbers before we move to AI. Our clients are already seeing results. 97% of our tech releases are now fully automated. We are deploying products 30% faster than we have done previously, and we have reported 28% Judy will share some of the customer satisfaction data later. 28% reduction in manual client payment queries in a relatively short period of time. That's been the impact of this work that has been seen by our customers, all of this resulting in much better client experience, which is what this work is in service of ultimately.
The foundations are now in place for us, and the focus goes from building to scaling, and that's where the beauty of AI comes in.
Yeah. Now we're gonna talk about AI, and I wrote down some of the questions that were asked. If I don't get to them, we're gonna have a little session at the end where you can ask us questions. The scale that Tanuj Kapilashrami talked about really only matters if complexity is reduced and it stays reduced. AI exposes complexity immediately through data quality issues, through hidden dependencies, through technical debt, and its capability curve is exponential, not linear. The pace is not just fast. This thing is structurally different from any technology advancement that comes before it. We are increasingly simple. We're more standardized and more connected across platforms. At our core, we are increasingly one unified financial platform across 54 markets.
That creates a simple ambition that we work on every single day: build a bank that gets better with every transaction and every client interaction. Our next frontier is to take that AI platform that Bill described and embed it deeply into the foundation as a structural capability, not as a bolt-on. The bank, in every transaction, learns from each one. We're doing that through 3 reinforcing elements. First, 1 enterprise AI platform, as I mentioned earlier, with intelligence built in, so AI can scale consistently across markets and businesses. Second, an operating model that identifies and automates routine, repeatable transactions while keeping human judgment where trust matters most. Third, a data and AI architecture that learns, improving accuracy, improving cycle times, and improving marginal cost as we scale. Excuse me.
What this enables is a business that can sense change, adapt faster, and act more quickly. Let's double-click on the platform for just a moment because it has three key characteristics to it that are really important to us as we continue to scale it. First, risk management. As I mentioned, we are, after all, a bank, so regulatory change, regulatory standards, the control environment are critical to us, and they absorb significant capacity across the organization. An AI platform in a network bank in particular must be able to codify controls, monitor them through automated guardrails, and be able to absorb regulatory change that happens very frequently with ease. Okay. Second, productivity. AI, our AI platform can handle routine initiation, validation, approvals, and again, that frees up people to focus on trust, clients, advice, relationships. Third, precision.
You know, in my opinion, this is the game changer for an AI platform because it's all about data and the quality and accessibility of data. We're moving from 150 fragmented data lakes across each state to a single global data supply chain that's cloud-native, standards-based with compliance built in. Better data improves model accuracy. Model accuracy gives us more straight-through processing. Straight-through processing frees up capacity for clients and for growth. What you see on the slides behind me are really just examples. They're not an exhaustive list, but they are the kinds of outcomes that we're experiencing now as we scale into this capability. We can see this very clearly across the bank as AI is applied end-to-end.
In payment operations, our AI platform can route routine transactions while surfacing exceptions in context so that people can make decisions more quickly. That improves our client experience, it lowers our unit cost per transaction over time. AI enables software engineering, in our SDLCs, software development life cycle, AI is helping us develop faster, increasing our time to market with fewer defects across the estate. We've also deployed Copilot across the enterprise. You can see the numbers behind me. We are targeting work that has low value, where time can be reallocated to higher-order, judgment-led, client-focused work. For us, the logic is very clear. We lower run costs, we lower production incidence, we increase time to market and capacity for differentiation. Stepping back, a platform changes the economics of change itself.
Each new capability builds on what's in place. What's come before it. AI deployments become faster and cheaper over time. It also changes how work scales. Growth no longer requires proportional cost increases because machines handle speed and volume while humans focus on clients, trust, relationships, and growth. That creates flexible AI-enabled capacity, and it's a powerful lever on cost to income over time. Because the system learns, the economics improve in a reinforcing loop. Better data, better models, more straight-through processing, more capacity freed. The investment thesis is straightforward. We're building a bank where the marginal cost of growth declines with scale. We believe that's what an AI-native enterprise delivers, and it's already underway here.
Thank you, Noelle. This brings us to a really critical inflection point, and I'm consciously running on time, so I'll make this very quick. We have secured our foundation. The work now is for us to accelerate transformation by embedding AI into our business processes. That's the work that we have already kick-started, and that's really going to be the focus over the next couple of years. A key enabler of this work has been the work we have done to identify our processes and pivot the organization to becoming a much more skill-based organization. This is not a tagline, but by deconstructing work into a set of consistent skills and identifying the activities that sit under the work, we can be very precise on what gets automated, what gets augmented, and what needs to remain human-led.
That's really the embedding of AI into our processes that sits on top of the foundation. Just to bring this to life by giving you some examples. In Singapore and India, where we have more than 50% of our hiring demand, we have launched agent-enabled employee onboarding. AI agents coordinate end-to-end onboarding, manage tasks, data, exceptions across systems, while humans retain the final decision on risk management and the end decision of the process. This work has reduced hiring manager effort by 35% and has led to a value creation framework which we are deploying into sizing the size of our HR operations outfit. It's a really tangible example of deconstruct work, decide where we deploy agents, what gets left behind on humans.
That is the process that we have been deploying across multiple of our processes. Treasury is another area where there's been some fabulous AI deployments that we have done. We have driven AI-driven decision-making in enhancing liquidity management with faster, clearer insights, demonstrating how we can scale AI, deploy AI in complex regulated environments. Across both of these examples, returns compound as each AI deployment accelerates the next, and that's when our economics start improving. That's when we structurally start decoupling volume growth in our businesses from headcount growth. That is the way we see We already are, but we see deploying AI across our business processes. Bringing you back to where this all started, our transformation, it's a journey. It's a continuum. What we are sharing with you today is a point in time as we see it today. What are the outcomes?
A very clear set of productivity metrics. Bill's alluded to them, Manus. I won't go through the numbers, but you can see it. A 20% increase in revenue per FTE, at least a 15% reduction in back-office headcount over the longer term, and a structurally efficient organization with a much improved cost-income ratio. There are three messages before we open for Q&A that Noelle and I want to leave with you today. First, we have delivered significant structural change in our organization, simplified the organization, modernized our core, and addressed complexity and risk. It's creating a more resilient and scalable foundation for the bank. Second, our transformation is about building an agile operating model, an agile operating system. This is what allows us to operate as a single global network, so we can scale without rebuilding costs every time.
The third, we are not standing still. We are continuously improving, innovating, and harnessing AI to activate better outcomes for our clients. Thank you very much. Noel and I will take any questions that you might have for us now.
Okay. Thank you, Noel and Tanoosh. We're gonna do questions, but I think Pearly had asked a couple of questions on this, why don't we just take those first. I think there was 1 around Fit for Growth. How this was different to Fit for Growth. Maybe Tanoosh should take that. Then there was a second 1, which was around AI and how much AI adoption is embedded into the revenue FTE targets that we've announced. Noel for that 1. Tanoosh first.
I exceeded the time limit on my presentation to answer your question in more detail. We are going to complete FFG by end of the year. I think the point I was hoping that I make, it's not just on the GBP 1.3 billion that we are delivering, but it's the investments that have been made in our foundation work that we've done, including a lot of the core investments that we have made on AI. Things like AI Factory, you know, the foundational work on AI did come out of FFG. This is a very important accelerator. The program will finish by the end of the year, and we'll give back GBP 1.3 billion in terms of costs saved. Thank you.
Let me ask if we answered your second question already or if there's a nuance to it you'd like us to address?
No, I think you've covered and answered it already.
Okay.
I think it's just about, because AI is moving very fast.
Yeah.
You know, it's one of those other things that we are all trying to adapt to. In terms of your the way you think about cost, like, at what point can you see the next version of Claude or whichever technology comes through, how do you think about investing in that versus maybe by just working with what you have?
Yeah. Okay.
Do you want to?
You want me to take that one?
Sure.
Okay. Let me talk about how we think about our AI stack, and maybe that, maybe that will help a little bit. At the foundational layer, I've mentioned commodity, right? I mean, we're very interested in ensuring that we have best possible pricing for GPUs, et cetera, and so forth. Above that, we're, you know, at the data layer. We have a partnership with Databricks to help us really get to that high quality accessible data in the global data supply chain that I talked about. Above that is a model layer, and we are agnostic at the model layer. The reason we're agnostic is because we agree with you. The capability curve here is like nothing we have seen before.
The idea that we're gonna out-innovate the market or any particular third-party relationship we have is gonna out-innovate the market is unlikely. We deploy a concept called portability. As much as possible, we are not perfect, but we deploy portability as much as we can. What that means is there are architectural patterns where you can move your models from one place to another. We try to help our businesses be agnostic and be able to ascertain for themselves based on the value created for their clients and for their businesses, which model is best over time. We don't think for a moment that the world will remain static.
Okay. Any questions in the room? Okay, Nick.
Yeah. It's Nick Lord from Morgan Stanley. Thank you very much for the presentation. firstly, just about Mythos.
Sort of how you are thinking about that. I mean, I presume you've not seen it yet. I'd be interested, you know, from what I do here, there's quite a lot of work that is required once you've seen it. I'd be interested to know how you're thinking about that. Second, you might have partly answered this already with Pearly's question, but which models are you using at the moment? Are you using open source models as well as sort of your proprietary and your GPTs or are you using some Chinese models as well as some of the U.S. models? Just be interested in more detail on that.
Brilliant. Both of those are for you, Noel. Mythos first.
Sure. Mythos, and we talk a lot about this as a management team. We've talked a lot about it with our board, obviously with our CISO. I think, we think, Mythos can best be interpreted as a signal, in a much broader trend around, you know, sort of the curve on vulnerabilities. It's, I think everybody knows what Mythos is, but just in case, you don't, it's a frontier model, that reports to be able to sort of detect and move to exploitation on zero-day vulnerabilities. You know, the bank has a sort of a 2-part response. The first part is very operational in orientation. We have vulnerability management practices. We have software development practices.
We have a defense in-depth set of controls implemented in the bank. We continue to tune those and advance those. Both our software development organization and our architecture and cybersecurity organization have been on top of this trend since long ago. Mythos is a point in time on a curve, but the trend has existed for quite some time. We have really been putting our energy into shifting left across the capability curve. Software and how AI is used inside the software development life cycle, as I mentioned earlier, to help our software developers, you know, sort of identify, predict, determine where they might need to resolve something before it goes out the door. From a more strategic standpoint, vulnerabilities take advantage of complexity. They take advantage of technical debt, legacy, architecture, et cetera.
You know, you heard us talk today about our technology and really our bank game plan, which is to resolve the questions about technology lifecycle funding and obsolescence, and really take that estate to the next level of modernization. That is as large a defense against vulnerabilities as anything else. Our cybersecurity, you know, perimeter defenses, our threat intelligence is really quite strong. We have a defense in depth strategy. We're shifting left. From a technology standpoint overall, the strategy helps by eliminating complexity and legacy technical debt.
Nick, can I just add, one of the points I made, when we were talking about FFG is the 10% reduction in our tech estate as one of the outcomes of the work just in the last 2 and a half years.
Yes.
We are doing the same with very clear targets on reducing our third-party suppliers. This idea is how do we contain that estate in a way that we can mitigate against the risks better.
It's a great point because, you know, the third-party ecosystem, you know, obviously not under immediate and direct control by Standard Chartered, right? Advancing our third-party security assessments in partnership with Tanuj's organization, who has procurement and relationship management for us with third parties, has been an integral part of the last year. We're well-served by it now in my view.
I think Nick had a second question just on which models specifically we're using at the moment.
Yeah. Our businesses predominantly make choices around models because they really create the business cases, they create the value propositions, they are closest to our clients, and can really ascertain. My suggestion would be that, you know, Judy is gonna be speaking this afternoon. She's very well-versed on this and can discuss it at length in terms of WRB and what we're doing there with regard to models. I would just say to you, yes, in answer to your question about which models are being used, right? We're quite agnostic. We're a pretty large bank. We have a large number of businesses, and they have different needs and different interest levels.
Over time, from a technology strategy standpoint, what we endeavor to do is make sure that we are precise with regard to model utilization so that the value matches the cost of the model, the improvement of the model matches the value and the expectations of the client. That's what we try to do to enable the businesses.
Jason.
Thank you. Jason Napier from UBS. Tanuj, with Fit for Growth restructuring charges and growth stage, we've slightly lost track of what organic cost inflation in the bank is. If you could give us a sense as to what the underlying rate of inflation of costs is. Then, Noelle, within that context, I think we all agree that the AI companies of today are not making any money and are spending a lot of it. What proportion of group costs is IT, broadly defined? Is it a problem that we don't really know how they'll be charging in a year or two from now?
Okay. I think on the first one, I'll probably turn actually to Manus to help comment on that, and then on the second to Tanuj.
Thanks, Jason. I mean, obviously what we're doing, Tanuj and I and the rest of the team, we're working very closely together on managing the cost of the bank going forward. We've given you an indication in the past of what the inflation and growth rates of the bank are. You've seen those walks previously. I think you should assume that that's an actual run rate that we'll be at. You should also assume that we have flexibility ourselves, both in terms of what we see in the environment and in terms of how we want to invest and the pace of investment that we go at. You've seen we've called out a historic cost walk in the past, and I'm not calling out anything differently now.
You should place that in the context of what we think we can achieve, in terms of the top line and what you think we can achieve in terms of improving on this efficiency as well.
Managing the cost of tech, and I know, I'd like Noelle to come in on this as well. I mean, one of the big things that we are doing is being very, very thoughtful on the cost of AI. The, I mean, the big one was Copilot, which we did very recently rolled out to a large percentage of our workforce. I'm gonna be very honest to say we took our time doing it quite intentionally. We took our time to roll out in a way which was a much more structured way. Deep analysis across job families. What is the value creation framework for a job family that we roll it out in, et cetera.
Yes, we are incurring the cost, but developing a very clear value creation framework to ensure that we have the right return on investment that we are doing with our colleagues from an augmentation perspective. In terms of buying tech with the overlay of AI, I know that's something you've been thinking a lot about, Noelle.
Yeah. I mean, I think Bill, you know, sort of referenced the points earlier today that I would give you first. I think it may appear to people that we might be a little slower than others with regard to AI. We don't publish numbers on, you know, sort of massive amounts of use cases and all these kinds of things that we see in the press. What we spent our time doing was investing in a platform because we fundamentally believe that the platform gives us scale, it gives us reusable capabilities, and it helps us sharpen our value creation framework, whether that is with regard to revenue and growth and client experience or whether that is, you know, operational efficiency.
Our AI book is about 50/50 across both. The marginal cost of reusing these capabilities is much slower than sort of a significant new build every time we have an idea. Then one more thing I would add, which is, I mentioned in my remarks that we have moved from large infrequent releases to small frequent changes daily. Okay? In my experience and in my opinion, that's how AI works best. Because oftentimes in generative AI in particular, it doesn't come out of the box behaving itself like one might hope, right? What you're doing is sort of constantly tuning your hypothesis around the problem statement and you're tuning the model to sort of get it to work.
If you go big in that frame, you're gonna spend a lot of money trying to get to an outcome that you could have proven, you know, at much lower cost. We try to have that discipline and the fact that we took our time on this platform, I think gave us the opportunity to really establish those frameworks. We have 2 you know, co-heads of AI. We have 2 folks leading it on the tech side. They work together on this framework to help our businesses and our functional groups really use this effectively.
Hi. Thank you. This is Catherine from JP Morgan. I have 2 questions. One is that, Standard Chartered operates across like many jurisdictions, and I think different governments may have different guardrail when it comes to AI implementations, right? How do we reconcile that? Say, for example, one example in China, I think they have very specific requirements on data storage and how to use data. Something that you build outside of China may be very challenging to implement it onshore, right? I'm not so sure about the other jurisdictions. I think they may have their own thing. How do you reconcile that and make sure that within this connected bank, this will still work for Standard Chartered? I think this is question number 1. Maybe this question first, and then I have question number 2, if it's possible.
Why don't you give the second question now?
Oh, okay, okay. I think for the second question, I think, okay, it's not easy to Let me think about how to put it. It's about, it's about layoffs. It's about like, staff management, right? Now we have AI. I think just now you mentioned a very good point is that AI handles the process where human handles like the trust, the relationship, the growth, right? I think that's a very ideal picture. In reality, I think some of our existing staff may not be the best fit in this type of model. How do we handle that relationship? Like, some of the tech companies in the U.S. are making very, how to say, chunky cuts, like 20% of the workforce and all those.
As a bank, how do we think about like, human resources and staff management on Sand? Thank you.
Sure. I think the first one on jurisdictions and AI restrictions, Noelle, and then we'll turn to the second for Tanuj Kapilashrami.
It's a good question, and we are in 54 different markets, so there are a lot of rules. The majority of rules are around data sovereignty and data storage. That really that's the majority of them. The AI frameworks from a regulatory standpoint are coming forward, I don't think they're substantiated enough to sort of, for me to comment on them really at the moment. Let me tell you about our architectural approach to AI because we saw this coming, right? We had a lot of experience over a lot of years in all of these markets. We use 2 concepts that are really quite important to this thesis. The first is orchestration.
What that means is essentially where data is rule-based at rest, meaning it needs to be kept inside of a particular country, and come to rest there and stay there and be encrypted. We honor that. What orchestration does is it will pull that data across the network if a client who owns that data wants access to that data. We manage the complexity, you know, in the network itself. The network really becomes part of, you know, a big part of the strength. The second concept I mentioned earlier is portability. Portability is a concept that says essentially, if something happens, I can move from one market to another market. I'll give you an example.
It's not in AI, but it is in data, and Bill referenced it this morning. You know, when Amazon had 3 availability zones taken out in the Middle East, and we do a lot of business in the Middle East. We have data stored in the Middle East. We have regulatory considerations about that data in the Middle East. What we did is partnered with our regulators and our risk teams and our businesses to move that data to the geo-resilient data centers that I spoke about earlier in my remarks, and we did it in a matter of hours. That kind of concept is the portability concept. We are employing that concept.
We're not perfect, but we are employing that concept as much as we can to be able to facilitate on behalf of our clients across multiple jurisdictions, which is really one of the huge value propositions of the bank. Yeah.
Let's go to sort of people. I mean, before that, I'll say we had a responsible AI Council in our bank before generative AI became a thing. You know, even before generative AI came up, we were talking about exactly the kind of questions you're asking today. You know, how do you kind of compete with AI-native companies, when you have multi-geography, multi-regulatory set of frameworks? This is something we obsess about a lot, as you would expect us to. On people, I spoke in my presentation about becoming a much more skills-based organization, and we've been on this journey now 6, 7 years. It's really not a tagline, but it is this realization that with AI coming in, the construct of jobs that we understand today is going to become irrelevant.
AI is going to impact every job, all of our jobs. We believe there'll be very few jobs that will fully go away, but we believe there'll be loads of activities in the jobs that we all do that will go away. I think that mindset of what does it mean to become a company where people's work is defined by the jobs they occupy to a company where you underpin all of the work by a consistent set of skills has been a journey we've been on for the last five years, and we've made huge amount of progress on it. What that has led is a big focus in our company on reskilling and redeployment. I looked at the numbers just last week.
If I looked at last year, over 50% of the new jobs that have been created in the bank have been filled by people internally by reskilling and redeployment. That number was less than 30%, even 18 months ago. This idea that these are skills needed for the future, we are gonna upskill our colleagues and deploy them in those roles is going to go away. We have been very clear in our presentation that structurally our back office or our corporate functions will be 15% lesser, and that means people's jobs are going to be impacted. We are gonna give our colleagues all the support for them to be able to reskill themselves for opportunities within our bank or opportunities outside. That's gonna be the philosophy within which we will operate.
Thank you. I know there's a few more questions, I think we are gonna have to stop there. Noel and Tanuj Kapilashrami will be around at the next break if you want to ask them any other questions. Thank you, Noel and Tanuj Kapilashrami.
I represent PIMCO. We are a 2-plus trillion dollar fixed income asset manager with both a private side and a public side. We're trying to find attractive opportunity to invest, and that's sort of what we get paid to do. We want to partner with banks to basically be a more efficient provider of capital than banks are. When you think of partnership, it's much easier to partner with somebody who has capital constraint and wants to work with us rather than someone who thinks they can do everything themselves. That we are capable of analyzing the risk that for capital reasons banks don't want to own, and then the risk which fits what we do, we take. The risk where we don't think we're the perfect bid, we'll just tell you, "Listen, there are better people than us to own it," and vice versa.
The relationship is quite symbiotic, and we have a very, very strong appetite for quasi and sovereign risk in emerging markets. We run a big pool of emerging markets. I think it is not believable that someone who's not a bank is gonna manage to rebuild the origination capabilities of a full-scale bank. The bank has a lot of other things. They can flex, and they also think about all the ancillary revenue, cash management, currency, transaction finance, all of the things that they do by winning the debt ahead of the direct lenders. I think that some assets are gonna be capital inefficient for banks because of what the regulator forces them to hold and not to hold. Those assets will end up in the hands of people like me. I think that makes sense.
I think a good partnership is a partnership where you have a long-standing trust, you know how to work together, and you go out of your way to make sure that you don't go around your partner to try to source your own risk. One of the things which has worked very well with us with Standard Chartered is we've used your origination capability to structure very good transaction, and we feel that our skills are complementary. I feel that you have looked after the interest of our clients, and we have found the right middle ground where we maximize our fiduciary duty and so have you.
Roberto, just confirming you can hear us.
I can hear you, David.
Excellent.
Can you hear me?
Yes, we can. Off you go. Thank you.
Great. Thank you very much. Thank you, Matt. Hello, everyone. Many apologies for not being able to join you live in person today. Not many things could have kept me from being in Hong Kong with all of you and the team, but my son's university graduation is one of them, and that's happening tomorrow morning. A year ago, we delineated our CIB business strategy at an investor seminar in London. Today, we're going to focus on how this strategy links to the themes that Bill has already outlined and how the area that we are confident will continue to drive momentum in our business. CIB has several competitive advantages that we've built over the past few years. One, our network is critical for our clients, and it can be reconfigured quickly in anticipation of supply chains and capital flows.
Network income is higher returning than single market domestic income and is growing rapidly. 2, our corporate business is unique due to our footprint and trusted long-term relationships. Credit origination from the corporate franchise and risk distribution into our global FI client base have driven balance sheet velocity and significantly higher returns. We're focused on significantly scaling this activity. 3, our sustainable finance income has crossed the $1 billion mark in 2025. We've had great results by introducing new sustainable technology into emerging markets and then financing it via our global FI client base. In digital assets, we've shown the ability to compete at the front end of the pack. We're moving from thought leadership to monetization, having completed a variety of transactions, including some firsts for G-SIB, as you will hear from Jeff Cott on Thursday.
Rising wealth participation in our footprint is a big opportunity for our business and one that we're positioned to capitalize on across our WRB and CIB franchises. CIB has the products, advice, and solutions that our wealth clients seek. Ray Ang, our Global Head of Private Banking, will talk to you about this later. Before we drill down, it's worth recapping a little bit on where we've come from in the past 10 years. Our financial performance has improved as we've narrowed our focus to areas of competitive differentiation. We've become much more disciplined in how we allocate capital using metrics and incentives that are directly linked to our desired client outcomes. Having established network income as our sweet spot, we've made it the biggest contributor to our revenue.
Clients value our ability to originate and transform risk via our markets and banking teams, and prize how the transaction services business can facilitate the seamless movement of cash, trade, and custody around the global network. We returned to accretive growth. We exited business lines that were not aligned to our strategy, such as principal finance and aviation leasing, and we reduced our exposure to local corporates. All of this has put us in a position where we can focus on structural long-term value creation. This makes us more resilient. Topline growth slowed a little over the last 2 years due to the falling rates headwind, and we have increased the quantum of our rates hedge to decrease sensitivity. We've built technology solutions that our clients value, making it easier for them to transact while improving our own operating efficiency.
To take a very topical example, we now provide digital front-end solutions for fiat underlying, which will also manage digital asset underlying in the medium term. We can deliver fiat and digital, whether one ends up dominating or whether they will end up coexisting. From a platforms point of view, deploying the Straight2Bank engine in payments or the SABR tool at the heart of our risk management offering in markets reflect our successful execution of single solutions. This makes us simpler, faster, and less error-prone. We target international corporates and financial institutions that need our network for distribution, execution, and sourcing risk. The league tables bear testament to what we've achieved in our chosen products and geographies. Importantly, we've not yet maximized the addressable wallet that is available from our largest multinational FI and corporate clients. This presents a very significant upside opportunity.
We're driving the cross-sell between products by measuring and then rewarding collaboration that delivers a tangible client outcome. We're building a far more sophisticated client wallet measuring tools and aligning our resources accordingly. Client review meetings and discipline around wallet planning have been introduced with a new level of focus, all led by a coverage banking division. Our MIS tracks performance daily and measures how effective our resource deployment is in generating accretive shareholder returns. As we look to the future, the goal is simple: deliver a best-in-class experience to our clients with a relevant product suite by innovative platforms. We're nowhere near saturation point, this is very exciting for the short, medium, and long-term prospects of our business. There are good reasons why we talk about our network, how it is unique, and how it drives high returns.
Clients need a bank that can provide deposits, financing, and derivative solutions at speed with seamless pricing and execution across the globe. We historically focus on domestic local market corporate business, but we have been aggressively pivoting by exiting or upskilling clients for whom we cannot deliver the best value and by serving corporates and FIs who treasure our cross-border strategy. This is why network income is now over two-thirds of our total income. Network income is growing faster than many of the external benchmarks that we all monitor, such as global market and trade volume growth, credit growth, global GDP growth, and swift payment volume growth. Our goal is to take network income above 70% of our total revenue stream, and we're well on the way to reaching that target.
If we now look at the patterns in our network, our corridors are reconfiguring and growing as the world's trade and investment destinations shift. This plays entirely to our existing competitive advantage. Our clients are showing a resilience to the change in the macro environment, and we are able to follow them. The fact that we have multiple corridors and no singular dominant corridor diversifies our revenue stream. China, for example, is one end of many of these corridors. They've adapted their supply chains and distribution channels, and we have facilitated this change across our footprint. We've located native speakers in relevant markets to best service our clients' needs wherever they operate. We see China into ASEAN and China into South Asia as growth corridors now and in the future. Looking at the Middle East, the region has increasingly been providing an attractive investment in recent years.
We participated in this trend with people, technology, and capital. We expect the geopolitical situation to amplify inbound opportunities into the GCC, particularly from North Asia. We've discussed the income growth from our network and our ability to evolve and reconfigure corridors as needed. When we supply our capital-light solutions across borders, we enjoy a far better return. Through time, we managed to go deeper with our clients by adding new markets and new products. We solve their complex issues, and we gain positive wallet share complexity. Our network yields enjoy an excess return on RWA of more than 200 basis points relative to domestic income flows. Our stats on cross-sell and the positive linkage between product penetration and the income multiplier tell a very good story. The multiple we achieve as we go deeper with a client is clear.
We make 25 times more from the clients in the green box versus those in the gray box. We now transact in three or more products or markets with 44% of our clients, up from 32% in 2019, and we still see further room for improvement. When the Venn diagrams of our network and clients' needs overlap, we build an enduring, valuable, and trusted relationship. Having discussed the overall trends for trade and investment corridors, I'd like to give you a snapshot of what this means for corporates and financial institutions. MNCs are having to adapt to evolving legal frameworks, regulation, technology, and the impact of climate change. The importance of operational resiliency is increasing year by year. COVID, tariffs, de-globalization, geopolitical changes are all leading to an increased need for infrastructure spend, French foreign, defense spend, energy and food security, amongst others.
Certainty of delivery is becoming more important than price. It is unrealistic that we revert to a world where all goods are manufactured locally for domestic needs only. A new equilibrium will be found, with key players expecting sovereignty over the key nodes in their supply chains. All of this creates enormous opportunity for our network business, playing to our strengths in the corridors that matter, regardless of whether they already exist or will emerge in the coming years. Now, the corridors for our financial institution client base are often quite different to those of the MNCs. Developed market FI clients want access to yield and new markets. Our footprint offers risk diversification and returns enhancement, and few banks can grant the access, liquidity, and structured solutions that we do by our branch and subsidiary network.
This has been a huge strength of ours for many years, but only in more recent history have we really concentrated on targeting FI flows. Conversely, the developing and emerging markets in our network need developed market solutions as populations age. Their need for long-term assets and asset liability management structures to fund pension and life insurance products is very real and tangible. We're in the right places at exactly the right time to meet the demand from local market insurance companies, pension funds, and asset managers who rely on our capabilities to solve their issues in an increasingly affluent aging world. FI is 54% of our CIB business today. The client base within FI is highly diversified, and we see growth opportunities in each and every one of these client segments.
Banks and broker dealers value our clearing licenses and access to markets where they lack presence and scale. Investors look to us for yield enhancement. We source EN macro and credit risk via our corporate and FI footprint engines, and we then distribute this risk. From vanilla to more complex structures such as TRFs and CLOs, our clients value our offering tremendously. The ability to originate and transform risk to suit client preferences is something we excel at and something that sets us apart from our competition. Network income and FI income offer superior returns on RWA, which is why we're optimizing the allocation of our financial resources towards these lines. Our aim is to maintain our trajectory in FI, which, as mentioned, currently makes up 54% of our income today, and our goal is to have this reach 60% by 2030.
Last year, we spoke to you about O2D, originate to distribute, at our CIB Investor Day. It's a model that has existed since the 1970s when banks started evolving from originate to hold, where they were long-term holders of credit risk, into arrangers, structurers, and distributors of risk. I highlight this because O2D represents one of the most impactful chapters in the convergence of commercial banking and investment banking, but also in the development of Standard Chartered over the last 10 years. We have shown an ability to push origination higher by taking market share and by adding new product capabilities. Our corporate clients value us addressing their financing needs in terms of capital and solutions, and our FI clients reward us as we enable access to diversified structures with attractive yields. This is still a massive opportunity for us.
Our goal is to grow origination at double-digit percentages and then distribute at even higher levels. This will enable double-digit income growth and single-digit balance sheet growth. The reason we built this capability over time, and we continue to do so, is because it is absolutely critical to our client strategy. Growing the FI client base and expanding CIB's capabilities in Europe and the U.S. has given us a far better traction on the distribution side. The very clear headroom to expand this space is why we're so focused on growing both our origination and distribution engines. Another most recent strategic priority, and one which we are now amongst the market leaders, is deploying capital towards sustainable solutions. The world clearly needs energy, and in the long term, it needs it to be plentiful and clean.
Demand from clients and investors remains very tangible, even in a universe of shifting priorities. The $1 billion we made in this segment last year achieved its public commitment one year early. A couple of real-world examples, we financed the world's first greenfield sustainable aviation fuel project and the U.K.'s largest battery storage asset. We provide sustainability-linked sovereign lending and non-recourse nature-based project finance. These transactions demonstrate our ability to combine balance sheet strength, structuring capabilities, and risk-bearing capacity to unlock new markets, mobilize capital, and deliver tangible decarbonization and resilience outcomes in both developed and emerging economies. In terms of CIB priorities, you can think of them as follows: growing the FI client base, improving our originate-to-distribute capabilities, developing a leading sustainable and transition finance franchise, and building a world-class digital assets offering.
On the latter, client demand is increasing as use cases become reality, whether that be for access, execution, custody, tokenization, or interoperability. In the last two years, we've executed payments on chain and distributed notes on chain, and we provide liquidity in crypto. We keep adding capabilities. As of today, the pure-play stablecoin and tokenized deposit providers are limited by licenses, regulation, and access to central bank windows. Each of these barriers will potentially drop away, and we'll be ready for a world where assets and liabilities move in real-time and on a 24/7 basis. CIB is investing in people and tech so that we'll continue to deliver for our clients as we enter a highly disruptive period for the banking sector. We see opportunity in this, in this disruption, and we're investing for growth.
With our recent hire of Ole Matthiessen, we're creating a single digital stream that works across all our product horizontals with full implementation and P&L accountability. As Bill has said, we've positioned ourselves as a trusted bridge between TradFi and DeFi, providing institutional-grade advice and rails to access, transact, trade, store, and manage digital asset risk safely and efficiently. We're deeply involved in the development of market infrastructure, working with regulators and governments to help create secure and interoperable ecosystems for digital assets. We've been experimenting in this space since 2016 and now see an inflection point with stable coins and related tokenized assets finding their way into the mainstream. Using transaction services as an example of monetization, having a single payments platform across the network in the form of S2E NextGen makes us simpler and faster to scale.
Clients connect their platforms via APIs into our easy-to-use solutions, and we're seeing rapid growth in products such as digitized cash and FX as a result. Simple and effective connectivity to our platform, platforms translate into steady, repeatable business. Other client use cases, in addition to custody and real-time settlements, include tokenized money market funds, risk mitigation via hedging of crypto, and collateral mirroring. Beyond digital assets, we're continuing to invest more broadly into our technology capabilities across CIB. In global markets, this means building scaled platforms and infrastructure that meet the needs of an increasingly sophisticated client base. Our markets business is being transformed. We focus on client needs and build content, products, risk transformation capability, and technology to service them with intent and purpose, delivering value at speed. We moved away from being a largely FX-dependent business to one that competes in rates, commodities, and credit.
We're a leading diversified EM fixed franchise and have increased market share significantly with key clients across the globe. We're now top three in EM FX and rates in APAC and a top five EM fixed franchise. A core outcome of our focus has been the growth in flow income, which we've shown you before. This is our income from regular, predictable, and consistent client deals as they transact in relatively liquid products. Flow business is high quality, recurring, and stable, and it is not dependent on market movements or outside financing or M&A, and we focus on growing this income stream steadily. In the last year, we've hired exceptional talent and deployed technology to keep growing our market share by streaming more products and prices to venues where we have the expertise to assess risk and provide liquidity.
These investments enable the expansion of the business, and we will continue to further scale this model, driving a growing and even more resilient flow income stream. In conclusion, our strategy will drive the group outlook of 5%-7% income growth from 2025 to 2028. FIs and corporate value our ability to originate, transform, and distribute risk by our markets and banking teams. In markets, we'll keep growing our client flows, and in banking, we will keep origination and distribution growth at double-digit levels. Clients rely on the transaction service business for the seamless movement of cash, trade, and custody around the globe. We will expand the transaction services business as the rate headwind is slowing, and we are better hedged. We will continue to innovate within the digital asset space.
Lastly, we'll continue to upskill our coverage banking team to provide more value to clients by ensuring that all our products are delivered seamlessly. Jan Metzger will be joining us soon to lead this effort. Our income outlook is underpinned by the five long-term structural shifts that I've talked you through. Network as a percentage of our income stands at 67% today, and we're looking to push this past 70% by 2028. FI income makes up 54% of CIB today, and our goal is to reach 60% by 2030. Sustainable finance will continue to be an area of differentiation for us. The investments we're making in technology are getting us ready for the fiat and digital worlds to coexist and compete. Rising wealth participation is reshaping our markets, and we're perfectly aligned to capture this trend.
These five long-term strategic focus areas will be supported by cost discipline in line with group targets. Improving capital returns remains our North Star for resource allocation decisions. I'll now hand over to Ray, who'll talk more about the opportunity we see to supply CIB products and risk management advice to our affluent clients, and then I look forward to seeing you in the Q&A. Thank you. Ray?
Thank you, Roberto, and good afternoon. Bill started by talking about us being a super connector. I thought I just had one slide to describe how we are super connected within the bank, right? Between WRB and CIB. Now, in the afternoon when Judy presents, you will hear an affluent section that will talk about a very fast-scaling private bank. Today, we are a top five player in Asia, including Dubai, in terms of AUM. Now, with this fast growth, we have attracted a lot of ultra-high-net-worth clients. These ultra-high-net-worth clients come in the form of individuals, family offices or multi-family offices. Their needs are evolving to be very, very sophisticated, right? This is where we need to deploy the CIB solutions, right?
To solution the corporates and also the trading teams that they have in their family offices. Now, we to meet this demand, we have formed Vertex, right? Vertex is a team, right? It's a sales coverage team for such family offices. This is a big investment for the bank, right? We actually started two years ago, but we are really formalizing it this year, right? Tanu spoke about one SCB, and this is exactly what one SCB is. The promoters, the individuals, the family offices, they wanna talk to one group of people, right? Instead of two. With one group of very specialized individuals that knows promoters, individuals, family offices, there are nuances in family offices, and also technical CIB solutions, we believe we can scale this franchise a lot bigger.
Now, you can see that in the last couple of years, I mentioned we started two years ago. There's a lot of strong two-way referrals, right? You see that, clients which are onboarded in CIB referred by private banking and the other way around, has really grown by double-digit cadence. Now, these clients have real needs, right? These clients have companies, they have trading platforms, et cetera. You can now see in the pie chart in the last couple of years, and these are completed deals, that we have facilitated many of such transactions within the bank. Private banking clients, ultra-high-net-worth, family offices in the pie chart, these are the transactions that we've done so far in the last two years. Moving forward, we also have a very, very strong pipeline.
In fact, year to date, right, I'm just counting the pipelines, right? We have probably 20 mandated pipelines just year to date with a bigger pipeline, which is we hope to be mandated. We will go into other solutions that CIB offers. You know, in terms of hedging, in terms of M&A, and also bespoke lending. We spoke about RWA, and we have excess deposits for a lot of these promoters and individuals and their companies. If we bank them on both sides, we are safer. With that, thank you very much. I think we're open for questions.
Okay. Thank you. We've got Roberto on the line. We also have Mark Bailey, the CFO of CIB, and we also have Ray. We're a bit tight on time, so we're gonna try and get around as many of you as we can. James at the back, you haven't had a question yet.
Hi, good morning. It's James Inghram here from . Roberto, there's a question for you, please. Just on page 70, you broke down the return on risk-weighted assets for the financial institutions versus the corporate business. Given that the world is in an increasingly uncertain place, we've got supply chain diversification, more liquidity preference, I think especially since Liberation Day. Do you think there's potential for that 6.1% return on risk-weighted asset from the corporate side to kind of move closer to the financial institutions bucket?
Thank you for the question. Look, the first thing I'd like to address is obviously we don't target the sub-segments specifically because they're a continuum, particularly in a world where we're really focused on originate to distribute. The trade works because they're circular, and the value we provide to one set of clients is also because of the value we provide to our other sets of clients as an intermediary. You know, we've been on a journey to really improve corporate returns by decreasing our suboptimal book and really trying to cross-sell more, as I mentioned in one of the other slides, multiple products per client. You know, if you ask me as a manager of the business, I think there's upside with all our client segments.
The point you make that as the supply chain shifts, there is more opportunity or more wallet probably to have fee income as opposed to sort of capital-heavy lending income for solutions as those corporate shift. The answer is yes. I think there is an opportunity to do that and then raise the profile of our returns across those segments. Thank you.
Arlen?
Hello. Two questions. Could you ever sort of what percentage of your AUM and your wealth business is a referral from the commercial bank would be really helpful. The second is in relation to the 5%-7% revenue CAGR you've given us at a group level. Can you help us think about the contributions from the three main CIB business lines? Within transaction banking, well transaction services, global markets, and global banking, what's the growth rate that you would encourage us to kind of model as the contribution towards the 5%-7% at group level?
Okay. On the private banking, I'll turn to Ray, and on the 5%-7% contributions, I'll turn to Mark.
Sure. With regards to the referrals from commercial banking or corporate banking into WRB, it happens in two forms, right? The first is on the priority side, which where we, you know, we do employee banking of our corporates, right, into WRB. There, okay, we see a lot of traction, right? Because these are regular savings and salary accounts, right, across a lot of our corporate companies, right? Now, I don't have the specific number, right? You know, in every single year, okay, we see a lot of these corporates being serviced, right, and the employees in WRB. For private banking, I think it has just started, right? You saw the numbers there, right?
The last two years, we're talking about hundreds of clients, right, being referred from CIB into private banking. The AUM, okay, again, in absolute terms, I don't not have. One thing that we that Judy will share is for all of the corporate referrals into private banking, the private banking AUM of these individuals are four times larger than the average private banking clients, right? This represents that we are truly it, and it doesn't happen overnight, right? When they first come, it's not four times. As we keep doing one FCB via a platform like this, when they get happier, they give us more both sides.
Mark?
Okay, I'll jump in. On transaction services, I'd really encourage you to think of we have spent an awful lot of time trying to build a kind of super connector that gives you the ability to do, you know, payments at volume, at speed. Last May, we pointed out to the fact that this business had some headwinds because of rates. If we look forward now, we've hedged the book very well, and we're more optimistic about the profile of that business. I would just sort of rewind your mind back maybe 12 months to what I said about the banking and market segments being C engines for this business. O2D driving that kind of banking segment. You've seen some really good numbers coming out of that.
When you look at the flow business or the f-flow element of markets, you can see that differentiation coming through. Those are the sort of three pillars we think of.
Okay. Let's go to Emmett.
Hi. Thank you. It's Emmett Gold from Mediobanca. Yeah, maybe it's actually a bit of a follow-up, but just wanted to make sure I understand as well, when we talk about the target supporting group 5%-7% income growth, I think on the group level is obviously greater weighting into non-interest income and maybe on the WRB side, there's a bit more on the viability piece. I just wanted to understand what you mean by supporting it. I mean, should you then expect for the growth here to be stronger than the 5%-7% or in line or just to check the thinking on that. Thank you.
Mark, do you want to take that?
Okay. I'll take my question. We're really committed to just delivering a group outcome. What Manus spoke about and what Dan spoke about in terms of raising liabilities and where we deploy them. The game of Standard Chartered is to work as a group and to walk towards a group goal where we're efficient in our balance sheet deployment. We are not given a specific target for you, but at a group level, you should be very confident in our, you know, outlook.
Okay, Chris.
Chris Hallam from Goldman Sachs. Just 2. First you talk about global markets being capital light. Maybe if you could just speak about the different levels of capital intensity across rates, credit EM, both comparing those businesses to each other and also comparing those other fixed franchises people may look at as well. The second question on FX. I guess that 4% growth is maybe a little bit lighter than one would have assumed, looking back in the past. Maybe where do you see the growth in FX going ahead, and what is prison and custody going to do to support that growth rate?
I think I'll pass that one to Roberto. Do you hear the question, Roberto?
Thank you. The markets business, if you think of the continuum of FX to then rates and then to the credit business, that is the way you should think about the RWA density going. Obviously, FX very large, rates a little bit heavier than that. Then the credit, the flow credit business, a little bit heavier than that. It's got some structured financing in it, into the repo business, et cetera, et cetera. The balance of those is something that we feel is very agile compared to other fixed franchises. There's very little asset heavy business in them. If you look at the flow businesses, the ones that are designated in the flow chart, they are effectively largely going electronically, largely very low consumers of RWA.
Occasionally, obviously, the macro business will have RWAs and deal contingent forwards, things like that in the episodic space. The business is largely capital light.
Okay. Andy.
Hi there, Simon from Kingston City. I had a question on slide 63, which is on the networks area growth. Help me provide this exact same chart a year ago at the seminar. The one thing stood out to me, which is that the total FC CIB income used to be the third highest bar on this chart. It used to be above the peers, and now you've dipped ever so slightly below. I'm assuming it's the transaction services business you sort of touched upon the hedging. Perhaps you could just elaborate on what happened last year, why you think you saw slightly lower growth than the peers, and if that was driven by the non-network side or a combination of both.
to you, Mark.
Thank you. I think you've answered my question for me. If you think of in 2023, what you saw is really a surge in the transaction services platform in terms of income. Then what we have done, and you can see this in our IRRBB disclosures, you can see that we've, you know, hedged our portfolio, extended the VaR on our portfolio. Therefore, as we have done that, we've locked in forwards at current rates. That means that you're not seeing growth in 2024 or 2025 at the sort of, you know, 2022, 2023 levels.
Okay. Joe.
Hi. One thing that seems to be changing is RMB internationalization. That has been out there as a trend, like fossil fuels versus renewables for a long time. If you look at the fifteenth five-year plan out of Beijing in March, clearly there's renewed emphasis on this, particularly given China's AI ambitions. In particular, you're starting to see the steps down on much more payments in RMB. How would you size the opportunity in RMB internationalization for the CIB and Standard Chartered?
Roberto, you want to take on that?
Yeah. I mean, that is a question that we could spend the next two hours on. That's a very interesting question. We think it is a unstoppable trend. In fact we made the announcement where we are actually having someone who will be one of my direct reports on the CIB management team who will focus Jerry Zheng on RMBI as a product and as a P&L opportunity in its own right. You can think of the macro environment in a couple of ways. One, the market is still short Chinese duration and RMB.
If you look at by any sort of metric, the amount of government bonds or CGBs owned outside China and the amount of FX outflows versus, you know, global trade percentages, all this sort of stuff is not at equilibrium. there's this trend towards equilibrium that will even at sort of everything else being equal leads to an increase in RMB business where we have all the licenses. We're a very strong market maker in bonds and FX, and we're one of the leading banks that provides those in and out of China. just the data environment from that reaching that equilibrium I think is very exciting for us. on top of that, when you add in digital assets, that's quite interesting.
You have dollar stable coins, which clearly are, in my view, a way to increase dollar hegemony, right? They get backed up, they free U.S. treasuries, and they in theory can create instant settlement transactions in dollars whoever is trading them. We don't have the equivalent of the trusted stable coins, large stable coins now in out of China. Let's see what happens there. You know, clearly, as the world's evolving, you can see that that's becoming an interesting space as well.
When I look at CIB or source of stability in China and RMBI in general as a theme in our corridor, the importance of China in the corridors to various parts of the world, and the growth in digital assets, which I don't know where digital assets end up, but I do know that if they become a primary source of the monetary system, I doubt very much China will not be part of that. If you look at these two trends together, it makes me very excited for having significant growth in this opportunity for us. For IDB space, we have the resources, we have the tech spend going from it. You heard from Noelle earlier today, just before. We find that that is a very, very positive lever for operating leverage in our business.
Joe, just a reminder, we have a separate breakout session on MI later. Kian. </edited_transcript
you don't have an equity business, but there I'm not expecting you to build one, but there are a lot of off-the-shelf products you can buy, white labels. I'm not advertising, but just trying to understand why aren't you doing that?
Shubebai?
I can in a while. Look, I think, you know, there's traditional equity businesses which we're not in, and you're not asking why we're not in. We, you know, have a strong history of partnering with clients on a variety of inorganic transactions. We are users of equities and equity derivatives and structured solutions. You know, we feel that we have a very complete offering to our clients for their capital needs across the spectrum. It's, you know, if you look at the completeness of everything, it's a missing link. It's a very expensive link, as you know, to bring in. Going forward, I doubt we will have an equities business.
If going forward, the right partner appears to do certain transactions, certainly in a space of technology, digitalization, et cetera, and distribution, we may well look at it.
Perly?
hello, it's Pearly from Bank of America. Maybe just following up a little bit on equity markets. IPO market is red hot at the moment. I suppose any ways that you think you can benefit from that, any products you need to be able to build in order to take some advantage of that trend. I suppose one of the trends we keep hearing is that a lot of wealth realization will happen as a result of these IPO, and that would have an interconnect with the private bank business. Given that you're not so involved in equity markets, do you think you've got those relationships anyway, and that when these entrepreneurs become billionaires, then you have that relationship to bring them to the private bank? That's number one.
Number two, very quickly with Mark, on income return on RWAs. Target is now greater than 25 in 2028. Looks to me that last few years were maybe flattish or if not down a little bit year-over-year. When do we expect an inflection point? </edited_transcript
Okay, Ray, did you take the first one?
Sure.
Thank you.
I guess the best example is Hong Kong, right? Because Hong Kong is experiencing a big equity IPO, well, last year and this year. Actually, you know, we do have a lot of relationships. I think the relationships, right, for equities in the case of Hong Kong, starts from China, right? We have a strong commercial banking in SME banking, right, business in China. It's been there for hundreds of years, right? The relationship starts there, okay, where, you know, these are all smaller enterprises, right, needing some maybe capital, okay, and before advisory, before they come here for IPO. A lot of these, we do have the relationships. What can we do without an equities franchise?
We can't take them to IPO, but, you know, we have been doing a couple of things with them, right? The first is when they IPO in Hong Kong, right, they need salary accounts. On the individual perspective, they, you know, we actually bank the employees that are based in Hong Kong, right? That's one. Two, for the companies that we know very well because we've known them for many years, with some level of balance sheet, we can also, okay, give them some financing before the IPO. Yeah. This financing could be maybe not to the company, but to the individual, right? Because they've been sitting in China's experience, a lot of tech lab kind of IPOs. They have been sitting on paper money for a long time, right?
What they do want, okay, is to buy maybe a simple insurance, right? They need liquidity for that to buy, right? When they IPO, the lockup period in Hong Kong is six months. Okay? The equity bank that will bring them for IPO does have the first bite of the cherry, right, in terms of custodizing their shares. After six months, you know, we again will knock on their doors to say diversify, right? Why would a promoter, you know, having now liquidated a few billion dollars, put all their monies in one bank? After six months, we are in the play again. Maybe short answer to that.
Mark?
Yes. Thank you for your question, Pearly. When we look at 2025 numbers, I think the critical sort of point that you're making out is that we dropped off from sort of 720 down to 700. That is a factor where just the fact we had the 600 million rather of rate headwind. If you normalize for that, and then you recognize that what we did is we deployed into fee income at markets and banking, then it's perfectly rational the actions that we took. As you look forward, we do see opportunities to now accrete from here. We've targeted and you know a lot of time and resources to going after the suboptimal RWA layer.
as Roberto sort of spelled out, the target now is to kind of go up against the clients where we can go deeper with, who we've got, you know, technological advantages, where we have, a history with those clients, and we think we can, generate greater returns.
Great. I think we've got time for one more question. Kun Peng, you've been waiting a long time.
Thank you, David. Thank you. Yeah, I have two questions. The first is on market business, because, you know, for some trading activities, even if they are client driven, in some extreme market conditions, they might also have some earnings volatilities on the banks, like we have said. We have seen of the summer trading on one of the U.S. top banks in the first quarter. How do you plan your trading desk across different asset classes to try to keep a quite stable or less volatile earnings flow of the bank? Secondly, from the two map charts of the network income growth on page 66 and 67. Yeah, with about the China-MENA flow. Yeah, on the FI side, there is an 88% jump.
I wanna know what is behind this kind of big jump. But on the other hand, the MNC side, there's no number, I assume, which it could be quite small. I also wanna know why the China to MENA MNC flow income is not that high because we know a lot of Chinese companies are moving there. Yeah. Thank you.
Thank you. On your first one around how the markets trading desk is set up, I'll pass that to Roberto. On the second, I'll pass it to Mark.
Yeah. Hi. Thank you for your question. Obviously we have a very developed our risk framework together with our second line colleagues on where we deploy VaR across our markets business. Obviously what you say is correct. If there's massive market dislocations and one has large positions, that can create negative PNL events. However, we feel that over the cycles, as you've seen in our numbers, we're pretty good at managing those. We don't tend to have short gamma positions. We're not enormous vol traders in terms of structures like some other houses are, be it in FX or equity derivatives. We kind of do most business based on very strong client flow.
For me, if I think of what I worry about for the market business and the flow business, it isn't massive volatility. As long as volatility is tradable, we tend to do very well because of the flows, our risk management system, our trading and sales collaboration. The incentives are completely aligned, so the collaboration on the flow business is as strong as I've seen in my career also because of that. To me, the thing that I don't like, and none of our traders like, is when clients don't do anything and nothing moves. That is really more risky, I think, for our revenues. We haven't seen that luckily, and I don't really foresee that, than big sort of discrete, volatility jumps.
Basically, we have a risk management framework and the kind of business that isn't really at risk with these big gamma shocks, largely speaking. Thank you.
Okay. Can I just add to that point and reference you to when Roberto was talking about the single platforms that we have built. We spend a lot of time building a platform called SABR, which is our market risk platform that allows us to see the risk across, you know, multiple products, which I think is talks to that thesis that we have of you build a platform and you replicate it and it helps you monetize flows. Second question that you had around network. What we have seen is clearly financial institutions from China investing into the Middle East. The Middle East area has been traditionally kind of I guess investing into other areas and we've seen that flow kind of change and they've been attracting investment.
when it comes to the corporates, what we have seen is the flows are kind of going from China into ASEAN, and we've seen them going into kind of Africa region, less so in terms of the Middle East for us at this stage. We're seeing a significant pickup in corporates in Africa and Middle East.
Just to make one last comment. I expect that corridor of China into the Gulf, as I also mentioned in the presentation, to be a big growth opportunity going forward. The operational resilience spend, which we've already seen some announcements, for example, by ADNOC, is going to be significant because this geopolitical situation. I would expect China and some other North Asian countries to be front and center in winning mandates to help out infrastructure builds in the GCC in the years to come. Thank you.
Okay. Thank you very much to Roberto, Mark, and Ray. I'm pleased to say it's now lunch.
Every day, leaders are expected to make sense of it faster than ever. Clarity doesn't come from noise. It comes from ideas.
The rise of women is reshaping the global economy.
The smartest organizations learn from failure.
A handful of companies are shaping the future of intelligence.
Crypto is not just a currency, it is a new financial system.
The best ideas don't just explain the world, they help shape it. The future of business belongs to those who understand it, the thinkers that will lead us through tomorrow.
integration of AI.
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Twenty years ago, I was working at the docks as a medicine trainee. Today, I help connect China and Europe's biggest financial players. We're not just bankers. We're advisors, ambassadors, connectors in every sense.
Hong Kong's a very exciting, very pulsating city. Anybody can come here and start from zero and have a chance to really carve a niche for themselves. That's what I tried to do with my trading business. I was getting into the right market. I was making phenomenal money. It was just exciting. Business is judged by profit, to be honest with you. If you make money in something, you feel very proud. Charity is different. It should always be the maximum good for the maximum people. The people who give back in life make the difference, make everything better, and I'm happy to give back and grow with Standard Chartered.
It was really good to start scoring. From then on, it was more easy.
Why?
You can't even explain. When I heard Flo had interest as well, yeah, it was like, "Top," you know.
My time will come, for sure. This year is just one goal.
Yeah. Was there a moment that you got together and said, "We can do this"?
I have to say something about that.
Decarbonization isn't limited to a single country or a single region or even a single company. The opportunity is a global one and really involves ensuring there is ample capital available for decarbonization projects.
Transitioning is highly capital-intensive. As a result, we see a lot of joint ventures, for example, being created between players in the U.S. or Europe and in Asia.
Standard Chartered has a very unique and wide global reach and a dedicated transition team with sector expertise and with some very long-established project financing credentials and experience.
This is for those who move. Those who don't wait for things to happen. They make them happen. Those who don't ask permission to dream. They don't follow maps. They draw them and build what isn't there. They don't call it instinct. They call it Tuesday because they know the world doesn't wait. Luck, it's just another word for 'I moved first.' At Standard Chartered, we're here for those who never stand still, who want trusted expertise in the world's most dynamic markets. Now is your time. Success is for those who move first, those who perform at every turn, those with a bank that drives momentum in the world's most dynamic markets. Success is for those who stay a lap ahead. Right now, every business decision carries more weight. New technologies, new risks, new opportunities. Every day, leaders are expected to make sense of it faster than ever.
Clarity doesn't come from noise. It comes from ideas.
The rise of women is reshaping the global economy.
The smartest organizations learn from failure.
A handful of companies are shaping the future of intelligence.
Crypto is not just a currency. It is a new financial system.
The best ideas don't just explain the world. They help shape it. The future of business belongs to those who understand it, the thinkers that will lead us through tomorrow. These are the ideas shaping the future of business and the people bold enough to write it. At Standard Chartered, we connect you to opportunities across borders, navigating complexity, unlocking access, and bringing the right insights at the right time. We combine deep local expertise with an international network, so our teams on the ground can help you move with confidence. Standard Chartered, making growth your next stop.
20 years ago, I was working at the docks as a maritime trainee. Today, I help connect China and Europe's biggest financial players. We're not just bankers. We're advisors, ambassadors, connectors in every sense.
Hong Kong's a very exciting, very pulsating city. Anybody can come here and start from zero and have a chance to really carve a niche for themselves. That's what I tried to do with my trading business. I was getting into the right market. I was making phenomenal money. It was just exciting. Business is judged by profit, to be honest with you. When you make money on something, you feel very proud. Charity is different. It should always be the maximum good for the maximum people. The people who give back in life make the difference, make everything better. I'm happy to give back and grow with Standard Chartered.
It was really good to start scoring. From then on, it was more easy.
Why?
You can't even explain.
When I heard Flo had interest as well, yeah, it was like top, you know.
My time will come for sure. Next year is just one goal.
Yeah, was there a moment that you got together and said, we can do this?
I have to say something about that.
Decarbonization isn't limited to a single country or a single region or even a single company. The opportunity is a global one and really involves ensuring there is ample capital available for decarbonization projects.
Transitioning is highly capital intensive. As a result, we see a lot of joint ventures, for example, being created between players in the U.S. or Europe and in Asia.
Standard Chartered has a very unique and wide global reach and dedicated transaction team with sector expertise and with a very long established project financing credentials and experience.
This is for those who move. Those who don't wait for things to happen. They make them happen. Those who don't ask permission to dream. They don't follow maps. They draw them and build what isn't there. They don't call it instinct. They call it Tuesday. Because they know the world doesn't wait. Luck? It's just another word for I moved first. At Standard Chartered, we're here for those who never stand still, who want trusted expertise in the world's most dynamic markets. Now is your time.
Okay, welcome back, everyone. We're gonna have a short video, and then we're gonna have Judy from WRB to present. Thank you.
I'm Anil Wadhwani, and this is my perspective. The trends that are governing wealth management in Asia are dominated by the emerging middle class. The need for the customers to risk diversify across geographies and across currencies is leading to a very different set of demands which the financial institutions have to respond to. There is a huge wave of intergenerational wealth transfer that is going on within the Asian markets. Add to that, we are seeing a trend of rising incomes. When you look at China, the demand emanating from China is focused on solutions that encourage more longer term savings. Where India is benefiting from the demographic dividend, where the demand is coming more in health and protection in wealth accumulation.
You then look at ASEAN, it has varying markets from Singapore, which is a very developed economy, to some of the more emerging economies like Indonesia, Philippines, Vietnam. Singapore and Hong Kong, alongside Middle East now complement London and New York as alternate financial centers. There are certain trends that are compelling and moving customers' behaviors from dormant assets into more active assets, and that is allowing the customers to think differently about asset allocation. You would see that trend move more from, you know, investments in deposits or in cash to more equity and into capital markets. Add to that, the access that the consumers have in capital markets is changing dramatically with the advent of digitization. If you look at some of the digital banks, that is also catalyzing a huge level of access that the modern consumer has to capital markets.
I believe that, again, significant gaps that we see in wealth management, in protection, in capital accumulation needs is gonna be a key driving force for the demand for wealth management products. I think the digitization of financial platforms have also allowed more democratization of capital markets. When financial institutions think about crafting solutions, this is gonna be a very critical factor when it comes to how you offer financial solutions to the newer generation.
Good afternoon, everybody. Welcome back. Hope you had a good lunch. I'm Judy Hsu, CEO for Wealth and Retail. It's a real privilege to be here to talk to you about our wealth and retail business. About 18 months ago, we had an affluent seminar. My colleagues and I talked a lot about our pivot to affluent wealth and international. At that seminar, we also shared with you a number of medium-term targets. Well, since then, we've been executing strongly with pretty exceptional results. Today, we have a much larger, higher-returning business with very strong underlying momentum. More importantly, our growth Sorry, I'm supposed to click to the first slide.
More importantly, our growth is built on a scalable and a durable engine, enabling us to capture the changing needs of our clients on the back of these very strong, powerful trends that Bill and the team talked about. We sit at the intersection of structural wealth flows. Everybody knows this. In Asia, wealth is growing, you know, at a much higher pace than global average, creating a much larger base of clients, of affluent clients. A high percentage of those clients are business owners, and we see a very similar trend within our client base, and that creates opportunities for us to do more with our clients across both their personal wealth and their business. That's something we're pursuing, and I will talk a little bit more later. Hong Kong and Singapore are emerging as the fastest-growing wealth hubs.
We have very strong franchises in Hong Kong. Earlier, you heard Bill talk about us as being one of the note issuer. In Singapore, we are known as the fourth local bank. Now, these positions are hard to beat. More importantly, we have a trusted brand, and coupled with our well-established domestic franchises in India, China, Taiwan, Malaysia, Indonesia, it really gives us a really privileged access to the wealth flows across our footprint. Intergenerational wealth transfer is accelerating, and you heard that from Anil as well. That's creating demand for advisory, structuring, and international diversification. We are investing behind those capabilities, you know, you heard from Ray, our private bank is growing very rapidly, and we are helping our clients in these very critical transitions. Younger investors are entering the markets earlier.
We are positioning our two digital banks, Mox and Trust, to capture that trend. I talked about us executing strongly with exceptional results. Let's start with optimization. We've been driving optimization of our business quite relentlessly. We've exited a number of markets, 10 markets to be exact. These are subscale off-strategy markets. We've also exited a large number of unsecured portfolios. These are, you know, really undifferentiated businesses where we don't think we have the right to win. We've also tail managed more than 2 million clients. Our RWA from unsecured is down $5 billion, and our headcount has reduced by 20%. Really a lot of work on optimizing the business and creating capacity to invest, and we are investing.
At the seminar 18 months ago, we had told everybody that we were going to invest $1.5 billion over five years, and that investment is happening at pace in all the areas that we said we would. In relationship managers, in specialists, strengthening our international banking platform and of course, our wealth capabilities. Extending our affluent segment to focus on private and priority private. Of course, advancing our digital platforms and elevating our brand, especially in affluent. We've grown our AUM. We've doubled our AUM in the last five years, and as you can see, at a much faster pace over the last two or three years. Now, executing such a transformation really requires everybody aligned behind a common North Star and a common set of goals.
You can see what we're focused on: acquiring the right clients, serving them well so that we can deepen those relationships, adding capacity, but more importantly, productivity, digital transformation and of course, most importantly, continue to serve our clients and improving that client experience. The results are very, very, very consistently strong. We've acquired 130,000 new affluent clients for 13 consecutive quarters. We've doubled our net new money to $52 billion, and we've grown our RMs by 18%. These are all over the last two years. We've reduced our time for onboarding our clients by two-thirds, working very closely with Noelle and the team. That's something we're really focused on. This is what we're really proud of, we've achieved best-in-class net promoter scores in eight out of our nine markets. We've done that in two consecutive years.
Our clients are actively advocating for us. One out of five new bank clients is coming through referrals from our clients. We are firing on all cylinders and pulling in the same direction behind a very clear growth strategy. Those efforts are leading to very strong growth and improved returns. Our income is up 9% CAGR. Our wealth solutions income is up 26% CAGR, underpinned by very strong growth in our AUM at 28% CAGR. Earlier, you also heard from Manus that we are creating a much higher level of net liquidity for the group. ROTE is up 300 basis points to 19.4%, and that's on the back of our income having a bigger share from our affluent business, now at 70%. You've seen some of these numbers earlier.
You know, when we are building a wealth business, it's just not about growing very fast, but it's also building a business that is sustainable, that is well-diversified. We have built a very well-diversified wealth solutions business. The double-digit wealth income number that I talked about earlier, that I referred to, is not coming from just one or two markets. 15 markets from across our network deliver double-digit wealth income. We've done that by replicating success, successful wealth capabilities, products across our network very, very quickly. When something works in one market, we will roll that out in another similar market. That is really, again, the strength of our network that you heard a lot about today. Our wealth solutions income is also very well diversified by asset classes, bancassurance, capital markets, investment funds and others.
Now, the capital markets, as you can see, the blue part of that bar chart, it's a very large part of our business. It's grown very, very strongly at 32%, but that is not consist of just, you know, one asset class. It's FX, it's fixed income, it's, you know, hundreds of different payoffs and structured products. It's investment funds. It's very, very well diversified. Now, this diversification has enabled us to maintain a very healthy return on assets despite our AUM being doubled. Why does it go? Somebody is doing this because they don't want me to say that I'm outperforming the market. Right? I wonder who.
No, we are outperforming the markets in both AUM, that's grown 29%, double that of our peers in Asia, and net new money, also, you know, more than doubled. We are taking market share. We are, you heard from Bill, the third-largest wealth manager in Asia. Now I'm gonna spend a bit of time to talk about the how. I'm gonna unpack how two mutually reinforcing engines are driving our performance, starting with our client ecosystem. It is differentiated because we don't source our clients from any one channel. It's not dependent on any one channel. In fact, this client ecosystem gives us very steady, repeatable, high-quality clients from our connected network referral, from upgrading from our very strong client continuum, from SME and corporate connectivity.
We do a lot of brand and marketing led marketing programs that bring in new clients. Of course, RM-led client growth, and we're also adding in, as I mentioned earlier, the two digital banks to our client continuum. At the end of the day, it's also not just about more clients, about higher quality clients at a lower cost of acquisition. Again, creating that operating leverage that we've spoken about. This is our client continuum. I believe some of you may have seen this in the affluent seminar. We serve more than 2.6 million affluent clients across the continuum. This gives us a repeatable, a scalable pipeline for upgrades along the continuum. The largest segment is our priority banking segment. This segment contributes to 50% of our income.
It's a rich source of sticky deposits and, of course, a feeder to our next segment, priority private. Now, we've been investing in the top end of our wealth continuum, priority private and the private bank, anchored on our international banking proposition. These three segments are doing extremely well. I'm gonna go through each of them with you. Starting with international banking. We've stepped up our activation of our network, and that has led to very strong cross-border network referrals, which is up 30%. Our international banking clients is up 40%. We now have 400,000 international banking clients. That's led to our income growing 50% in this segment, net new money 2 times, and more importantly, 1/3 of our international banking clients use us in more than one market.
In fact, you can see from these bar charts, when they use us in more than one market, their AUM goes up 2 times, three markets, the AUM goes to 2.7 times. More and more of our clients are using us in more than 2 markets. Global Chinese is a big thrust for us, just given the opportunity. If you look at our net new money mix, it remains very well diversified. A third from global Chinese, a third from domestic. We have a very strong franchise in Hong Kong, so we continue to grow our domestic business here. Another third from other international clients like Global Indian, ASEAN, et cetera. It remains quite diversified. Priority private. Priority private is our high-net-worth segment that sits between priority and private.
We've launched priority private in seven markets across our network to just phenomenal success. Earlier you heard from Ben, this is our newest yet to open priority bank, priority private wealth center. He didn't mention to you that wealth sits at the heart of the shopping district of Causeway Bay. We chose this place because of the fabulous feng shui. We're not doing the feng shui for ourselves, we're doing the feng shui for our clients. When they bank with us, when they place their wealth with us, they wanna go to a place where they feel, "Hey, this is a good place." It is a good place. These wealth centers, now we have 20 of them across our network. This is where we hold a lot of client events. Market updates, networking sessions, lifestyle, events.
We encourage, you know, we encourage many of our clients to bring their friends, relatives, associates. This is another, a very strong source of member-get-member. When clients come here, they bring their friends and we open many new accounts, priority private accounts. The biggest source of our, as I mentioned earlier, the biggest source of priority private clients is upgrade. Three-quarters of our priority private clients come from upgrade, which makes this model highly scalable. As you can see, the income here is pretty amazing. It's up 80% to priority private, net new money 10 times. Number of clients is 70% up. When a client moves up from priority to private, their AUM with us triples. This is one of our highest returning segments.
Over time, we have the scope to double this client base. You heard a lot about the private bank already from Ray. We are fast-scaling the private bank. We are now number five in Asia. You know, we're investing in RMs. Our RM base here is up 30%. Working closely with our colleagues in CID to better serve our ultra-high-net-worth clients. It's a very exciting segment. Our private bank is profitable and highly accretive. RMs. Very often when I do these investment seminars, people always ask us about RMs. I'm gonna talk a little bit about, you know, how we think about RMs. We've done very well in terms of bringing in new RMs.
As you can see, we grow our RMs by 18%. We have disproportionately invested in more senior RMs. That population has grown by 40%, double the number of the, you know, overall growth. You know, it's not just about adding RMs and growing linearly. You know, when we bring in RMs, our job is to support them well so they become productive and successful as soon as possible, and we've done that. You can see that our RM grade retention is very, very healthy. This is really important because when an RM joins a new organization, if he or she becomes productive quickly because we enable them with onboarding, very strong onboarding client support, giving them training, giving them specialists, they bring other RMs on board.
In fact, 30% of our RMs are referred by our existing RMs, and that's a fabulous, I think that speaks incredibly about, you know, our reputation in the market and the momentum as an employer of choice. You can see, you know, our RM value proposition, actually one of which is our international and internal RM mobility. You know, we don't only have a client continuum, we have a talent continuum. Many of our RMs, grow with us as well, which is super important. I talked, earlier about the opportunity to bank business owners, across both sides of the bank. The biggest opportunity, I think, would be, China plus one. We're seeing more and more, Chinese, SMEs, mainly MEs are expanding their businesses overseas.
Given our strong corridors and networks, we've been supporting them in that expansion. As they bring their businesses overseas and they create wealth overseas, we are then, of course, the natural partner for helping them manage their wealth. I see that as a really big opportunity. Now, 20% of our SME RMs are already our affluent clients. When they give us, you know, both sides of their business, their AUM goes up by five times. Again, you know, it really speaks to I think earlier Ray also talked about, you know, CIB, and the private bank. Doing more with clients really helps us increase that wallet.
We have our SME RMs and our affluent RMs working together to visit our clients, and our referrals are up, the referral is up three times. The digital banks, Mox and Trust, they have reached meaningful scale, and in the next phase of growth, they will continue to bank the mass market retail clients in Hong Kong Singapore. At the same time, we're strengthening the digital wealth capabilities to really be the attractive place to be, the platform to be for their investments. We see both Mox and Trust as the incubator of next generation of wealth clients for the group. Leading wealth engine. This is the other engine of our two engines that I talked about. I think you're more familiar with this.
We have been investing a lot in our CIO capabilities so that we can, you know, provide much deeper, much broader insights for our clients. That's the brain. Our open architecture product platform is a real differentiator. We work very closely with our partners, be it asset managers or investment banks, to innovate, create exclusive products first to market, and we've been doing that very well, and you can see that driving a lot of our sales as well. We've been digitizing many of our journeys. I gave you some numbers earlier. Now we're adding AI to power our entire advisory process. This is the engine that drives speed, scale delivery, and performance for our clients. Speaking about AI, and you're gonna hear more from my colleagues Mohammed and Leichu in the breakout room.
Of course, you heard from Noelle earlier. What we're building is an operating model that will leverage our agentic AI to support the entire life cycle of a client, from prospecting, onboarding, advisory, deepening and servicing. Through that, we believe that we will create even greater value for the business. You'll hear more and really welcome you to look at what we're thinking around this area. Moving to our targets. Our strategy is working. Momentum is strong. I think we have a very, very strong, resilient business. We are committed to reach $200 billion cumulative $200 billion net new money from 2025 to 2028.
We're committing to delivering double-digit wealth income from 2026 to 2028 and bringing forward one year in reaching our affluent income of 70% of our total income by 2028. That, of course, will help the group deliver our 15% ROTE by 2028. I just want to end by saying that, you know, we are extremely proud of what this franchise has become. We are super excited, my colleagues and I, about where we will go from here. Now I would like to invite Jean for Q&A. Thank you. By the way, Jean is the CFO for WRB.
Yeah. Thank you, everyone. We had a couple of questions earlier that I think might make sense to start with first. The first one, I think it was in Dylan, Manus's section, which was around the net new money and how sustainable that $50 billion could be beyond 2028, but also the potential for that to drive higher. There was also a second question, I think, around the margin on the assets under management and how sustainable that was. Maybe if Jean you could take the first and then sorry Jean take the second.
Yeah. Net new money is a result of us, you know, growing our clients and deepening that relationship. If I look at the net new money, the strong growth in the last few years is really from both new clients and existing relationships. The other driver is also the mix of our business. We've invested heavily in international at Priority Private and the private bank. What we've seen, and you saw from my slides, that those segments are growing very, very fast. I think, you know, the momentum we're seeing in the business is very strong. Hence we're confident to upgrade our target to reach $200 billion, now, you know, bringing that target one year forward.
Just keep in mind that this is a pretty aggressive target. We are growing faster than our competitors. We are taking market share. You know, I think it's also important to grow quality rather than quantity. I hope that answers your question on net new money. Jean?
Jean, go for it.
Yeah. Turning to return on AUM, you saw the chart which Judy shared before. We have been hovering around 130 to 140 basis points over a fairly large number of years. More recently, as we converted a few client mandates in custody to AUM, our ROA levels are now at 1%. Underlying this, we see strong monetization of our AUM and deepening of clients. What will drive sustainability here is essentially the diversification of our business. We are building very strong affluent franchises in multiple markets. You saw the double-digit AUA growth in wealth income in more than 15 markets. Judy talked about the diversification of our products, which with both capital market products and managed investments growing strong, double-digit, 30% plus. Finally, it is our client continuum.
We operate across the client continuum with different profile of clients, from investors, transactors, savers. Together, this will help us to maintain sustainability in our ROA.
Great. Who would like to go first? Okay, I'm gonna go to James at the back first.
James Inman here from Rothschild here at Redburn. I've got two, please. The first is on the custody portfolio that you transferred, thank you very much for kind of calling out exactly the impact that it's had. That's still a big chunk of AUM. How long does it take that to get fully invested? 'Cause that could be really quite a material movement on your revenue line if you get it up to the kind of 140 adjusted level. The second question is your affluent business, everything you say about it sounds really good. I guess what it implies is that the mass market retail is, you know, much less profitable. What are the plans, you know, there do you have?
You've still got, I think, $130 billion of loans in WRB. I presume that, you know, not much of that relates to the affluents. Where do you take the mass market business from here? Thanks.
I think on the first one, I'll ask Jean to come in on the custody portfolio. On the second, Judy. </edited_transcript
Coming to the custody portfolio, these are long-term relationships, right? We don't expect them to fully monetize. Really, it depends on the client needs and what he wants to do with that portfolio. In the short term, sometimes it is about using it for leverage lending. In the longer term, as they think about diversifying their wealth, that creates opportunities for them, for us to move them across asset classes. Large custody mandates typically held by promoters take a fairly long period of time for monetization. Before I pass to Judy, in terms of our lending book, $130 billion, a large part of that is mortgages and secured lending. The unsecured fees, we already talked about running that business down.
Exactly what Jean said. Our lending book is predominantly to now serve our affluent clients, mortgages and secure lending, wealth lending, which is a growing piece. As to our personal banking or mass market segment, Singapore, Hong Kong, these are attractive markets that we will continue to pursue. We are bringing, as I mentioned earlier, the two digital banks into the continuum to capture the growth in this opportunity. In the other markets, what we're doing is as you heard from Manus, as we are exiting the single lending relationships like personal loans, many of the books we've decided to exit it.
We are reallocating the resource to actually go out and acquire upper end of the personal banking clients, creating a much richer source of clients for upgrade into priority. You can say that everything we do now is quite focused on supporting the growth of the affluent business in the long run.
Judy, do you mind just telling on the proportion that mortgages?
Yeah.
to the rest?
Yeah. Judy? Yeah, I can share the deal. Around 20% of that is wealth lending, the leveraged lending we talked about. The remaining around 50% plus is mortgages, and then there's a little bit of SME and the rest is our unsecured CCPL book. That's kind of the broad mix. The largest is mortgages. The largest is mortgages, yes.
Which is why you're exiting.
No, we're not exiting. We're not. We're not exiting.
You're just-
Yeah. Okay. Yeah. Yeah. Many of the mortgages are, like I said, supporting our affluent clients. Yeah.
Okay. Gonna get to Melissa, and then she's asked a question, yeah.
Hi. Thank you. Melissa from Goldman Sachs. Just in terms of market share you said you have been increasing over time. In terms of your targets, do you see yourself being able to overtake the next position in terms of market share? Or do you think like with interest floating and just because it's growing as a pie, we'll all be growing together. The other thing is within the sector then, global Chinese, either international and domestic, where do you see as the biggest growth sector in the next like five years as you see it? Also in China as, you know, property markets get better, are we a bit more concerned whether or not the flows are coming here? So is that to taper a little bit.
Well, I think both of those probably to Judy. The first one around AUM. We're third of I think that you were referencing AUM, right, in terms of our ranking and where how soon we could get to number two. That was the question.
Oh, yeah. The third is the where do I see the opportunity?
Yeah.
Well, we are closing the gap with number two.
Which-
We would like to close that gap faster. We also acknowledge that this is a highly competitive market. We are investing, we're growing fast, and we hope to accelerate that closing of the gap. </edited_transcript
Judy, can I just in-
Sure.
Just ask, in terms of closing the gap, is there any consideration for acquisition of portfolios to accelerate that a little bit more or only organically?
Well, if there are opportunities, and we're always reviewing, we will definitely explore. As Bill mentioned yesterday, currently, we don't see anything yet. Also because I think you can see organically we're growing really, really fast. On the second question on the diversification, I think the global Chinese will still be a huge, I think part of the future growth, in the next five years. Not necessarily from, you know, growth, the flow from China into Hong Kong and Singapore. We talked about, you know, the IPO earlier. That's one. That the wealth is of course, that liquidity sort of event, is one.
you know, I talk about the business, the large number of businesses, you know, coming out of China into ASEAN. In fact, you know, Malaysia, I don't know, if people are familiar with ASEAN. The Malaysian government has this program called Malaysia My Second Home. Recently, we had a global Chinese event in Malaysia, where we had more than 200 global Chinese attending, that event. They're all business people. We're banking them on both sides. We have SME and we have affluent franchise. In fact, we have extended our global Chinese proposition to Malaysia just because, there's such a large and growing, population of Chinese, affluent community. I still see that and, you know, they're doing business outside, and growing their wealth.
ASEAN is growing not as fast and we are taking market share in parts of you know Malaysia Indonesia but that would Vietnam right? We have to be very selective in terms of who we onboard in Vietnam. I think that global Indian. I would still think that these are the larger larger client segments that will continue to be the biggest plus for us from an international banking perspective. Yeah.
Okay. Who else in here? Okay. Alan?
Thank you very much. I wanted to check, the framework that you've painted for thinking about wealth solutions revenue growth, the double digit, I think that's a pretty consistent framework that you've presented for a few years, which is double-digit AUM formation, some view of margins and that kind of, you know, underpins the double-digit revenue guide. You're clearly materially outperform that number now for the same period of time. I'm looking at your wealth invested assets in Q1 are up 1% year-on-year. Obviously your revenue growth rate was 35%, you know, higher year-on-year within Wealth Solutions.
Yeah.
Can you help us kind of marry the disconnect, the massive disconnect, which is between the double-digit revenue CAGR medium term and the current outsized level of growth that you're delivering? Is that simply driven by transactional activity, brokerage revenues? What's driving it? I guess when we're trying to project forward, should we continue to think of an upward skew versus whatever this double-digit revenue CAGR is? The second question, I was just wondering, in terms of your net new money, could you help us kind of roughly break out how much of that is coming from your existing customer base versus the new to bank customers? If you've got a rough split, that'd be really helpful. Thank you very much.
Okay. I think on the first one, I think I'll turn to Judy, and on the second one, on the split of the net new money for Jean.
When we think about our double-digit target, it's really a medium-term target, right? It's not trying to project, predict the next quarter or even for 2026. We wanna compound this business at double digits growth rate. That's the vision for this business. There will be some quarters where, you know, you're gonna see higher growth rate, and there will be some quarters where you won't. You know, there are uncertainties in the markets, inflationary pressure and other potential, you know, shocks that we would want to take into consideration as we set the double-digit target. Right now the underlying momentum is strong. We are getting net new money.
We're deepening with existing clients, which I think that's the next question that Jean can share with you. We continue to be very excited around the opportunity of how this business will continue to grow. Hence we are committing a double-digit CAGR and really it's from 2026 to 2028. It is an upgrade of our target, actually.
Coming back to your question, first of all, you could split it into three client types, right? New to bank, upgrades, and then the existing clients. When it comes to upgrades, last year, 10% of our net new money, around 8% of our AUM came from upgraded clients. When we measure new to bank clients, we typically look at their contribution to our growth. A little less than two-thirds of our net new money comes from new to bank clients. They also deliver two-thirds of our wealth income growth. Of course, the absolute comes from the existing client base as well. That's how we kind of think about the mix of our business.
let me just define the new to bank. New to bank is not somebody who just came in yesterday.
Yeah.
We count new to bank as somebody who's been onboarded for the last 12 months because it does take time for us to onboard the clients, build a relationship, deepen. you know, the net new money and even our wealth income is a bit of a lag, right? the leading indicators would be, you know, are you onboarding new clients. The other thing I wanna add is we're changing the mix of our clients, right? today it could be two-thirds from new clients, but we're continually upgrading the quality of our clients as we pivot to affluent. more of the net new money will come from existing clients because we also, you know, upgrading the mix and the quality of our existing clients. I just wanna add those two points.
Yeah. Okay. Toni.
This is Toni from Bank of America.
Yes.
You mentioned that the market is quite competitive.
It is.
I just want to understand your propositions a little bit better because as I can tell, a lot of success comes from a lot of lifestyle branded, initiatives, including the very famous Cafe card-
partnership. Can you help us understand, first of all, the economics of these things? I can't imagine that, you know, that partnership would come cheap. Also, just in terms of proposition, it's sort of a lifestyle element. Is that one way to think about it? Also, like getting miles in terms of like, I think the payroll account, that sort of thing. Like it's, there are a lot of these initiatives that I would love to hear a bit more about.
Sure. The initiatives you talk about are those are initiatives for us to acquire local clients. The Cathay card is a fabulous partnership. It's true, it's not cheap, but it more than you know, the return on that is fabulous. If you look at our partnership, we've aligned our propositions within the Cathay card. It also has a priority private card. I hope you have that one. Do you? Anyway, it's a fabulous card. You earn miles. We get a lower you know, when we buy miles, we because of the bulk that we buy, we're able to acquire those miles, obviously at a lower rate than the retail clients. Then we use that mile to acquire clients who bring in net new lending, right?
It's entirely accretive. We don't give that to anybody. We are very, very you know, one of the KPI is not just growing clients, grow the right clients. We, you know, we look at the channels, new clients on various channels, the quality, the return, the ability to deepen, and we get better and better at going out than to target the right client, right? Channel acquisition, the precision in which you target a marketing program as well as these rewards is very, very important for us to break even on a lot of these lifestyle privileges. Those privileges are predominantly for local clients.
Now, international clients, the acquisitions is generally a lot of referrals to, you know, the ecosystem that I spoke about.
Okay, let's go on this side of the room. Yeah.
thank you very much. It's Gary Lam from HSBC. The question is more on bank insurance. We noticed that bank insurance growth has exceeded agency growth in Hong Kong for a couple of years. Among the leading banks around, versus the two larger banks, that are present here, the other two banks have the in-house insurance, manufacturing arm. As Standard Chartered grow in scale, would you consider strategically to explore an in-house manufacturing capability? Maybe the second question is, on the data, it shows that your time deposit growth, materially exceeded, your, competitors who focus more on CASA. I was wondering whether it's a related observation that because your competitors sell more insurance policy versus in Standard Chartered, maybe you've been selling more structured deposits.
That's how to explain the difference in the deposit growth dynamic.
You're talking Hong Kong, right? </edited_transcript
Yeah.
Okay.
I think, yeah.
Okay. Sorry.
First one for Gillian. The second, I think, for Jean. We also have a separate session on Hong Kong on Thursday as well.
I think, you know, we've in our management team, we talked about should we think about becoming an asset management firm many times, given that we are focused on wealth. Should we also think about, you know, becoming insurance? At this point, we're growing the business and focusing on, you know, serving the affluent clients, working with CIB on the CIB product capabilities. We have a great partnership with Prudential that's like more than 25 years. We've outpaced the agency model because this partnership, they know who we are. They understand our clients, they understand the needs. We work very well together and that partnership has grown.
From a client perspective, from a product capability perspective, I don't think we need to go into insurance just to support the clients. I guess in other words, no. According to- </edited_transcript
Do you know who to sell it?
Yeah, coming to the deposit mix. I think if you see every quarter, we publish this statistic, right? More than 50% of our deposits are in CASA. More recently, when the rates were higher, yes, we saw faster growth of TDs and a bit more migration from CASA into TDs, but our CASA mix remains healthy at over 50%. In a high interest rate environment, there are different ways in which a client could take advantage of the rate environment. TDs is one of them. It could be fixed income products, and of course it could be savings products which come from our bank insurance team. Really it's a function of how the client wants to benefit from that rate environment. From our perspective, we grow strongly in deposits in Hong Kong.
We have a very high market share, including Mox. I think it's close to 10% here.
Cassandra, you've been waiting patiently.
Thank you. I have some questions is about TD because I think one of the takeaway-
Private bank.
Private bank, yeah. One of the takeaway for me is that I didn't know bank is that strong in TD because perception-wise that strong, but that is not the focus, right? My questions would then be: How did you get to number 5? What is the competitive advantage of bank private bank? Because I think private bank clients are very well sought after by every player on the streets, right? What is your competitive advantage? My guess, I don't know if this is right or wrong, would be that bank is very good at like, say for example, leveraging on the CIB capacity by servicing MI clients. Some of the products you are able to tailor-make for the private banking client versus the other shops may not have that capacity.
I don't know if that is one of those capacity. Can you elaborate a bit on that? How did you get those clients and then grow the AUM at a much faster rate than the number of clients growth, right, for PB? The second question is a minor one. I saw that there's a 20% reduction in headcount. On the other side you also have 80% increase in AUM. How do you reconcile that then? Does it mean that in terms of like say the back office, the middle office, you have a lot of reductions on that part and then, you know, so that you can grow your AUM but reduce the overall headcount. Thank you.
Yeah. I answer the second question and nobody knows this better than Ray. He built the business. Is it okay if Ray answers the private bank question? I'll just quickly talk about the headcount. The 20% is overall WRB so it's a bigger number. The 18% is just the relationship manager, which is I would say 15%, 20% of our headcount.
It's a historic figure because-
It's yeah and that headcount includes our operations. We in WRB we have a larger operations team as well. It was also driven by
mass market.
mass market.
Mass market.
mass market branches. Yeah.
They-
Yeah, exactly. The 20% is not the same denominator as the 18%. Ray, you wanna-
On the private bank, indeed, we have been growing very quickly. You know, if you track back, I think in Judy's slides, like, top five today, right? Two years ago, eight, right? Five years ago, 14, right? In terms of AUM tables. I would answer it in three parts, right? One, people, process, right? And products, right? From product, I think we have you know, the open platform really comes into play for private bank. You see just now capital markets. What do private banking clients really want, right? They want sharp, right? Best execution. Capital markets, when you have open platforms, for the high net worth or higher net worth, they're really sensitive, right? Speed, right?
Best execution and sharp rates come from open platform rather than buying in-house. That's products. Process. I think process is super important, right? Because for affluent clients, you really cannot afford to make mistakes. With Noelle and Tanu in the morning, right? You see a lot of that investment into our platform and process. This is quite unique. I came from a pure play a couple of years ago, right? The level of dollar investment on product and process for pure play is far smaller compared to a universal bank like us because we have scale, right? We can leverage best practices and scale and digitalization for process. Speed is one. The last I guess is would be people, right? Probably the most important one.
When you go from 14 to eight to five, you know, the RMs out there, they notice us, right? You know, success breeds success. People wonder how you can grow so well, and they come knocking to say, "Hey, actually, what's your formula?" Right? We have seen other RMs come here and succeed very well. More will come. It's not only the RMs, I think the seniority of the managers, and also the MPs, right? You know, when we go for events, every year, the whole GMP is there, right? Think about that. The whole bank is really coordinated. Now with Vertex, I think we will, you know, just grow even further.
Sure.
Great. I think we have time for one more question before we need to move to the speed dating session. Ken Pang.
Yeah.
Thank you for letting me be always be the final one. I had a very quick question about numbers, about the 400,000 international clients. I assume all the global Chinese, global Indian, global ASEAN clients are in, within that-
Yeah
-number, right? Can we have some breakdowns of these international clients across the 4 layers of the affluent client base, both in terms of the numbers and AUM and incomes? Yeah. Thank you.
I'll just say which is the fastest growing, which is global Chinese and global Indian. We don't disclose the mix. The fastest growing is global Chinese and global Indian. These are our two biggest for us. We have designed, you know, very curated and targeted propositions to help our global Chinese. In fact, our program for the global Chinese is called From Departure Hall to Arrival Hall. We support our clients when they move to Malaysia, Singapore, Vietnam, to make sure that whole experience onboarding is seamless. You can see where we're investing. We don't disclose the mix. Thank you.
Okay. With that, I think we are closing this session, and we're gonna move to the speed dating. Thank you very much.